European Gas Prices Drop After Trump's Remarks - Sarmad

Natural gas prices in Europe fell after US President Donald Trump stated that further strikes on Iran were not necessary.

Standard futures contracts fell for the third consecutive session, dropping 4.3% before partially recovering. Oil prices also declined.

Trump said on Monday evening, “Iran is militarily effectively finished. We are just maintaining the status quo.”

Hope for progress in peace talks and for a recovery of supplies from the Middle East has grown since the US midterm elections. Democratic lawmakers in Congress are considering whether to use the upcoming December 11 deadline to avoid a government shutdown to pressure Trump into ending the conflict.

After surging to their highest levels since 2022 last month, European gas prices have fallen by more than 20% so far in November. However, they remain poised to stay high unless exports from the Middle East recover, a region that accounted for about one-fifth of global liquefied natural gas (LNG) flows before the war.

Europe is particularly vulnerable to price volatility because its winter gas stocks are unusually low, increasing its reliance on global LNG flows in the coming months.

LNG shipments loaded onto tankers from Qatar have increased over the past few weeks, indicating that the main supplier is seeking to deliver more cargoes to the global market despite ongoing disruptions in the Strait of Hormuz.

However, a recent cold wave and weak winds in parts of Europe have added pressure to the region’s gas stocks. Withdrawals have surged in recent days, with average storage levels in the European Union dropping to 72%, compared to a five-year seasonal average of 89%. In Germany, the level is only 59%.

The decline in stocks in Europe’s largest economy prompted the German gas storage group, Ineos, to issue a warning that gas supplies in the country could not be fully guaranteed this winter if extremely cold temperatures are recorded.