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Natural Gas Update: European, US Futures Retreat on Middle East Diplomatic Progress, Milder Weather

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European natural gas futures witnessed a steep pullback on Monday amid reports of progress in diplomatic efforts to bring an end to the conflict in the Middle East, while US natural gas futures slid as the September heat began to fade, lessening demand for cooling.

Front-month Dutch TTF futures declined 6.56% to 74.305 euros ($85.33) per megawatt-hour, while British NBP futures were down 6.84% to 184.600 British pence ($2.47) per therm. Front-month Henry Hub futures were down 1.58%, at $2.995 per million British thermal units.

US President Donald Trump told a Fox News reporter by telephone on Sunday that he would probably be open to meeting Iranian President Masoud Pezeshkian, who was scheduled to visit New York to attend the United Nations General Assembly this week.

European gas inventories remain below historic levels, at just 69.62% of capacity, compared to 81.38% a year ago, according to Gas Infrastructure Europe. Inventories were also significantly below the five-year average for this period at 85.4%, according to the Swiss Federal Office of Energy.

The Cove Point LNG facility has begun its annual maintenance on Friday, with a two-to-three-week outage expected to curb LNG export feedgas demand in the near term.

What else is happening in Oil & Energy?

Oil & Energy

Oil Prices Diverge as Saudi Pipeline Disruptions Offset by Export Reroute Plans, Diesel Hits Record Highs

Crude oil futures were mixed this week as markets balanced severe Middle East infrastructure outages against reports of pipeline restoration and rerouted exports.West Texas Intermediate settled at $99.40 per barrel, down from $99.99/bbl the previous week, while Brent closed at $103.05/bbl, up from $104.50/bbl a week earlier.While WTI futures gained marginally over the week, Brent shed 1.23%.Geopolitical and operational disruptions remained the primary market drivers.Prices settled higher on Monday due to pipeline strikes and vessel attacks. Futures climbed again on Tuesday amid ongoing outages, retreating on Wednesday as Saudi Arabia offered additional Asian cargoes via Oman. Thursday and Friday saw further pullback amid reports of pipeline restoration progress and export rerouting."Middle East oil flows remain surprisingly strong despite the disruption to Saudi Arabia's East-West pipeline," J.P. Morgan analysts said. They said that over the past 10 days, total oil flows averaged 17.1 million barrels per day, about 6.1 mmb/d below the 2025 average.Last week, Saudi Arabia shut its East-West oil pipeline as a precaution following attacks in the Riyadh and Medina regions. However, latest reports indicate Riyadh is seeking to restore about half of its capacity within days and is boosting ship-to-ship transfer operations off Oman's Sohar port to supply Asian refiners.Meanwhile, the US blockades reduced Iranian crude exports to roughly 210,000 barrels per day in August.US Secretary Wright noted during a Fox News interview that 18 million barrels of crude and refined products moved through the Strait of Hormuz with US assistance. The US Department of Energy confirmed the remarks in an emailed response to.Commerzbank analysts highlighted that the Middle East shock is increasingly transmitting to Asian energy costs via higher crude prices and sharply higher freight rates.On the supply side, the US Energy Information Administration said in its weekly report commercial crude oil inventories decreased by 600,000 barrels to 423.4 million barrels in the week ended Sept. 11. The draw contrasted with a 7.1 million-barrel build reported by the American Petroleum Institute for the same period.Meanwhile, the UK Maritime Trade Operations issued alerts about two separate incidents in which tankers in the Strait of Hormuz were struck by unknown projectiles, resulting in fires that were successfully extinguished without reported casualties.At the same time, Ukrainian strikes on Russia's Syzran refinery in the Volga region helped drive diesel prices to record highs, coming on the heels of a proposed energy truce floated by Presidents Trump and Volodymyr Zelenskyy.Average US pump prices have climbed to $4.47 per gallon for gasoline and $6.45/gal for diesel, driven by massive spikes in the Great Lakes states that underline zero tolerance for domestic refining downtime, energy expert Tom Kloza posted on X on Friday.US diesel prices reached a record average of $6.44 per gallon, adding to fuel-cost pressure as global supplies remain constrained, the American Automobile Association said Friday. US diesel prices averaged $5.47/gal a month earlier and $3.71/gal a year earlier, AAA data showed.The US oil rig count rose by two from 450 the previous week to 452 in the week ending Sept. 18, according to data from Baker Hughes (BKR) released Friday. The US had 418 oil, 118 gas, and six miscellaneous rigs in operation a year earlier.The consolidated North American oil and gas rig count, a key early indicator of future production levels, decreased by six to 792 from 798 the previous week.Money managers stayed net long WTI crude futures and options for the week ended Sept. 15, per the CFTC's latest Commitments of Traders report, released Friday. However, the margin narrowed slightly as fresh short selling outpaced new long buying.The data showed that money managers reported 229,893 long positions, up 3,140 from Sept. 8, while short positions rose 5,711 to 93,125. That puts net long positions at 136,768 contracts, down about 2,600 from the prior week's 139,339, indicating a modest drop in bullish speculation.

$BKR
Oil & Energy

US Oil Update: Crude Settles Lower as Market Assesses Supply Risks, Mideast Tensions

Crude futures settled lower in after-hours trading on Friday, extending losses for a third straight session, as signs that Saudi Arabia could restore some crude flows eased concerns about supply disruptions despite renewed fighting in the Middle East.Front-month West Texas Intermediate futures dropped 2.3% to $99.53 per barrel, while Brent futures fell 1.3% to $103.46/bbl.Saxo Bank strategists said that the retreat comes despite continued disruption through the Strait of Hormuz and renewed Saudi-Houthi fighting.Saudi Arabia and Yemen's Houthis exchanged fresh attacks across their border on Thursday, raising concerns that the widening Middle East conflict could further disrupt energy supplies already strained since the start of the Middle East conflict in February.China has reportedly asked Iran to help limit attacks by the Houthis on Saudi oil infrastructure.Meanwhile, risks to commercial vessels through the Hormuz persist amid Iranian threats to ships using routes it regards as unapproved. Iran's Revolutionary Guards Corps said on Friday that its military struck a Togo-flagged oil tanker after it attempted to illegally pass through the Hormuz.Soojin Kim, research analyst at MUFG, said that the recent decline in spot oil prices reflects a perception of moderating geopolitical risks, but continued threats to both Hormuz and Red Sea routes should keep Brent above pre-war levels and volatility elevated.

Oil & Energy

LNG Supply Risks Could Persist Through 2035 Amid Gulf Disruptions, Wood Mackenzie Says

Global gas and power markets face shifting supply and demand pressures from LNG disruptions, low European storage and rising electricity needs, Wood Mackenzie said in a Thursday note.Wood Mackenzie expects LNG supply to average 30 million metric tons per annum lower through 2035 under a summer settlement, versus 70 mtpa lower under an extended disruption, with Gulf LNG projects delayed up to five years.However, over 150 mtpa of LNG capacity is being developed outside the Persian Gulf, which could help global supply growth pick up over time.Those supply risks make European inventories an important market signal, as low storage levels could keep the region exposed heading into winter despite slower Asian LNG demand.Beyond Europe, rising electricity needs are emerging across Asia Pacific, where data center growth could lift annual power demand growth to 4.3% from 2025 to 2030, compared with 3.5% without data centers.In Asia Pacific excluding China, data centers have 53 GW of planned capacity, nearly three times the 14 GW already in operation. The trend extends to the US, where the industry is seeing a renewed dash to gas, with turbine orders also rising.