European natural gas prices finished the week sharply lower, with subdued demand and continued storage injections outweighing concerns over LNG flows through the Strait of Hormuz. The easing of Hormuz-related fears coincided with a retreat in market pricing.
TTF contract levels and weekly movement
The October TTF contract traded at €71.16/MWh, around 10.5% below the previous week’s €79.51/MWh. The contract had briefly moved up to €74.94/MWh on Sept. 24 before weakening again.
That Sept. 24 recovery followed uncertainty around US-Iran contacts and LNG shipments returning to the market, according to the same pricing sequence. The later decline resumed after those factors faded from the front end.
EU storage levels and demand backdrop
EU gas storage stood at 70.24% full on Sept. 24, compared with more than 80% a year earlier. Lower inventories have not produced sustained upward price pressure so far.
Demand has remained below the levels seen during the 2021-2022 energy crisis. Europe has also expanded LNG import capacity and diversified supplies, limiting the impact of tighter storage metrics on prices.
Strait of Hormuz developments and winter preparedness
The latest price drop accelerated after reports that Iran could consider reopening the Strait of Hormuz if talks with the United States resumed and restrictions affecting Iranian ports were removed. The market remains highly exposed to developments around the strait.
A prolonged disruption could push European and Asian buyers into stronger competition for alternative LNG cargoes as heating demand begins to rise. European authorities are due to reassess storage, supply conditions and winter preparedness in early October.
Geopolitical developments tied to LNG availability are expected to be among the main near-term risks supporting volatility around the softer gas-price trend.
