European Natural Gas Set to Snap Five-Week Winning Streak on French Supply Resumption

European wholesale natural gas prices are poised to snap a five-week winning streak, weighed down by the resumption of normal operations at a key French import terminal. Despite a modest rebound on Friday, benchmark futures are headed for their first weekly decline since mid-August.

Weekly Prices Retreat

The benchmark front-month Dutch TTF contract, a key indicator for European gas prices, rose 2% during Friday's session to trade around €78.50 per megawatt-hour (MWh). However, this was not enough to offset earlier losses, putting the contract on course for a 1.8% weekly decline and breaking its longest stretch of weekly gains in four years.

In the United Kingdom, the equivalent NBP wholesale contract also advanced 2% on the day to near 195.00 pence per therm. For the week, the British benchmark was set for a similar 1.9% loss, ending its own five-week rally.

Conflicting Market Drivers

The primary catalyst for the weekly price drop was the conclusion of a labor strike across France’s energy sector. The industrial action had previously constrained operations at the Dunkirk LNG terminal, France's largest, reducing export flows to Belgium and Germany before normalizing midweek.

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Friday's intraday price rebound reflects persistent market anxiety over geopolitical friction in the Middle East. According to the source, attacks on Saudi oil infrastructure and Houthi strikes in the Red Sea continue to disrupt LNG tanker traffic, forcing some shipments onto longer, more expensive routes.

Storage and Inflation Context

Underlying the daily price movements are Europe's structural inventory levels. According to data from Gas Infrastructure Europe, the bloc's underground storage facilities are approximately 68.5% full. This level leaves the continent potentially vulnerable to price spikes from early cold snaps as autumn approaches.

The volatility in energy markets remains a key focus for central banks. The European Central Bank has previously cited high natural gas and electricity prices as a chief driver of Eurozone inflation. Similarly, the Bank of England warned on Thursday that a rate hike to 4% in November remains a possibility if energy input costs do not cool.