Europe’s benchmark natural gas prices slumped on Monday from their 2024 high from last week as Israel’s retaliation for the Iranian missile strike was limited in scope and targets and avoided energy infrastructure in Iran.
Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, were trading down by 3% to $45.68 (42.20 euros) per megawatt-hour (MWh) at 1:45 p.m. in Amsterdam on Monday.
The futures prices fell from their 2024 high hit last week after an outage in Norway made traders nervous while expecting the Israeli strike on Iran.
Despite the outage at the unmanned Sleipner B platform, its operator, Norway’s energy giant Equinor, has assured markets that it continues to meet its gas supply commitments. Despite the platform shutdown, gas supply to Europe from Norway, its single largest supplier, has remained stable.
However, the risks of other supply disruptions, including from the Middle East, sent Europe’s natural gas prices rising last week for their biggest weekly gain since August.
But this weekend’s measured response from Israel, which avoided targeting any energy infrastructure in Iran, eased concerns about supply from this region. As a result, European prices fell, as did international oil prices.
The measured response from Israel and signals from Iran’s Supreme Leader Ayatollah Ali Khamenei that there would not be any direct response to Israel’s strikes in Iran helped to cool tensions. The dialing down of the rhetoric from Iran is seen as a possible starting point of de-escalation, and oil prices and European natural gas prices reflected the easing of the war risk premium.
Supply concerns for Europe have eased, for now, also because the EU’s gas storage sites are 95% full and the 90% target was reached well ahead of the EU’s self-imposed binding November 1 deadline.
Weather forecasts for the next two weeks suggest somewhat milder temperatures than normal in northwest Europe, which could see lower gas demand for heating.
By Michael Kern for OIlprice.com
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Publish date : 2024-10-28 10:45:00
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