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EMEA Natural Gas Update: Futures Ease as Traders Take Profit Amid Winter Supply Concerns

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European natural gas futures edged lower in after-hours trade on Wednesday as traders took profits following a five-session rally, while the ongoing US-Iran stalemate and concerns over a potential winter supply crunch continued to support prices.

Front-month Dutch TTF futures fell 0.112% to 63.575 euros ($74.19) per megawatt-hour, while UK NBP futures edged up 0.032% to 157.040 British pence ($2.14) per therm.

European natural gas prices retreated as traders realized gains with prices near their highest levels since March, Investing.com said.

Benchmark Dutch front-month futures eased from multi-month peaks, retreating from intraday highs and trading lower for the session. Equivalent British wholesale gas contracts also pulled back from five-month highs as energy desks took profits following a week-long repricing driven by Middle East geopolitical risks, Investing.com said.

However, trading desks stressed that the fundamental downside for European energy prices remains strictly capped by severe supply disruptions in the Persian Gulf, according to the report.

Iranian Foreign Minister Abbas Araghchi said Tuesday that Tehran would not accept a ceasefire with the US, but only a deal that fully ends the war. US President Donald Trump said earlier that there were no ongoing talks with Iran and no new discussions scheduled.

Meanwhile, few LNG cargoes have moved through the Strait of Hormuz since hostilities began in late February. Most Qatari exports are destined for Asia. The average of Asia's imports from Qatar in the three months before the war against Iran was just over 6 million tons, representing about 88% of Qatar's total volumes, Reuters reported.

The sharp loss of Qatari cargoes has forced Asian buyers to compete with European buyers for replacement LNG cargoes as Europe seeks to replenish inventories ahead of winter.

As a result, traders are increasingly concerned that Europe could enter the winter heating season with insufficient gas reserves, underpinning prices, Trading Economics said.

European gas inventories stood at 61.37% of capacity, compared with 73.95% during the corresponding period a year earlier, according to Gas Infrastructure Europe. Inventories were also significantly below the five-year average for this point in the year, at 78.4%, according to data cited by the Swiss source.

Europe's extreme heatwaves this summer have also squeezed wind output, preventing spot power markets from narrowing price spreads between solar-intensive hours and evening peaks, while heat-induced droughts have hampered nuclear and thermal power generation, Montel reported on Wednesday.

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$KMI