European natural gas prices steadied on Thursday, pausing off one-week lows as energy markets assessed diplomatic developments in the Persian Gulf. The Dutch front-month contract, the regional benchmark, traded virtually flat at €65.61 per megawatt-hour, while British wholesale gas futures hovered near 160.50 pence per therm.
The stabilization followed a 3% decline in wholesale gas prices on Wednesday, which coincided with a broader commodity selloff driven by reports of advancing negotiations between Washington and Tehran. The talks include provisions aimed at protecting commercial shipping through the Strait of Hormuz, a critical transit route for global energy supplies. Sentiment improved further after Qatar’s Prime Minister traveled to Tehran to assist in mediation efforts to restore unhindered maritime transit.
European gas fundamentals remain tight ahead of the autumn heating season. Regional storage injections have lagged due to sustained summer power demand amid continental heatwaves and delayed Qatari liquefied natural gas cargoes. Gas Infrastructure Europe data shows EU-wide storage at 62% capacity, below levels typically seen at this stage of the year. ING analysts noted that injections are running well behind schedule, raising concerns that Europe may struggle to meet EU-mandated storage targets before winter.
In the United States, high gas inventories—nearly 8% above the five-year average according to UBS research—provide a potential buffer. Domestic production remains robust, and new export terminals and pipeline infrastructure nearing completion are expected to bolster LNG supply to Western Europe later this year, provided shipping lanes remain open. Brent crude held around $87.40 a barrel, having found support after four consecutive sessions of decline.
