Investing.com – European wholesale natural gas prices hovered to four-month highs on Friday, putting benchmark contracts on track for a fourth consecutive week of gains – their longest weekly winning streak since May last year – as intensifying Middle East transit disruptions and warnings over low regional storage levels fueled winter supply fears.
The Dutch front-month contract at the TTF hub, the European benchmark, pushed 0.4% higher to trade near four-month peaks, while the equivalent British wholesale gas contract mirrored the advance, up 0.3%.
Both benchmark contracts are poised to close out a fourth straight week of gains, driven by persistent geopolitical risk premiums across energy commodities and tightening global supplies of liquefied natural gas (LNG).
Bullish sentiment across gas desks was further reinforced after Equinor, the bloc’s largest domestic gas supplier, warned earlier in the week that Europe is unlikely to achieve its target of filling underground gas storage sites to 80% capacity before the onset of winter. Equinor Chief Executive Anders Opedal noted that European storage levels currently stand around 54% – below the five-year seasonal average and at their second-lowest level in 15 years.
The supply shortfall is being exacerbated by escalating Middle East hostilities, which have disrupted tanker shipping through the Strait of Hormuz and halted a substantial portion of global LNG flows.
With Persian Gulf supplies curtailed, Asian buyers have aggressively outbid European utilities for uncommitted flexible LNG cargoes, diverting shipments away from continental import terminals.
The sustained surge in wholesale gas prices continues to complicate the macroeconomic outlook for European central bankers.
With energy costs feeding directly into broader price pressures, money markets are increasingly pricing in the risk that elevated fuel bills could delay further interest rate cuts or force monetary authorities to maintain a tight policy stance for longer.
Related articles
European gas futures hit four-month highs, set for fourth weekly gain
China cuts Iranian oil purchases by 40%, Bessentsays
UBS recommends adding gold exposure on pullbacks at this price