European Gas Drops as Traders Assess Supply Outlook

European natural gas prices dropped further below €78/MWh on Thursday but were not far from a more than three-and-a-half-year high, as traders assessed the region’s gas supply outlook. Europe is heading into winter with gas storage levels among the lowest seen in two decades, with inventories standing at around 68% full, as sustained disruptions to LNG supplies from the Persian Gulf and record summer heatwaves have severely constrained efforts to replenish reserves. This has heightened concerns over supply adequacy ahead of the heating season. Strong demand from Asia and other buyers could drive more intense competition for LNG cargoes when colder weather sets in. Meanwhile, investors are watching for clearer signals on Germany’s gas purchasing plans, with any increase in buying potentially providing further support to prices amid tight global supplies.