European Natural Gas Prices End Five‑Week Rally as Supply Normalises and Middle East Tensions Persist

European and UK wholesale natural gas markets closed Friday with a modest 2 % uptick, but the late‑session rally was insufficient to keep the five‑week winning streak alive. The Dutch TTF front‑month contract climbed to about €78.50 /MWh, a 2 % rise from Thursday’s low, yet the week‑long trend turned negative by roughly 1.8 %. In Britain, the NBP front‑month contract mirrored the move, trading near 195.00 pence per therm, but the benchmark was set for a 1.9 % weekly decline.

The key driver behind the weekly pullback was the resolution of a labour dispute that had disrupted regasification and send‑out operations at France’s Dunkirk LNG terminal. The stoppage had sharply cut export flows from Dunkirk into Belgian and German networks, but operations returned to normal mid‑week, easing immediate supply concerns and weighing on futures.

Despite the supply relief, market sentiment remained cautious amid ongoing Middle East tensions. The seven‑month‑old Iran conflict shows limited signs of de‑escalation, while attacks on Saudi oil pipeline assets and continued Houthi activity in the Red Sea have restricted LNG carrier movements through the Strait of Hormuz. Shippers are diverting to more expensive routes, sustaining a risk premium in gas pricing.

Structural inventory levels also loom large. Gas Infrastructure Europe reported EU underground storage at about 68.5 % full, a level that could leave utilities exposed to a cold snap as autumn approaches.

The price trajectory has intersected with monetary policy. Following rate hikes by the Federal Reserve and the European Central Bank, ECB officials highlighted natural gas and electricity prices as key drivers of inflation above 3 % in the Eurozone. In contrast, the Bank of England left its policy rate unchanged at 3.75 % but signalled a likely 4 % hike in November if energy costs do not ease.