Why European Gas Prices Won’t Come Down Despite Tuesday’s Pullback

TLDR

• European TTF gas prices slipped 0.7% to around 82.80 euros/MWh after hitting 2023 highs Monday
• European gas storage sits at just 68% capacity, below the five-year seasonal average
• The Strait of Hormuz remains largely closed, with a key diplomatic meeting in Oman postponed
• Brent crude climbed above $113 a barrel after a strike on a Saudi pipeline threatened 4% of global supply
• The U.S. Federal Reserve begins its two-day FOMC meeting Tuesday, with markets pricing a 90% chance of a rate hike

European natural gas prices pulled back slightly on Tuesday after hitting their highest levels since 2023 the day before. The benchmark Dutch TTF contract fell 0.7% to around 82.80 euros per megawatt-hour (MWh), just below Monday’s peak of 83.40 euros.

In the UK, the NBP wholesale gas contract also fell 0.7% to 200.10 pence per therm. That still keeps it above the key 200-pence level after touching multi-year highs in recent sessions.

The dip came as traders took profits at the end of a volatile run. But the broader pressure on gas markets has not gone away.

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