European wholesale natural gas prices dropped by as much as 9% on Monday. The decline tracked a sharp sell-off in global crude oil markets.
The Dutch TTF front-month contract retreated from four-month highs reached late last week. Britain’s equivalent gas contract saw a similar decrease as geopolitical risk premiums narrowed.
De-escalation between the U.S. and Iran eased fears of disruptions to the Strait of Hormuz. This shift improved the outlook for liquefied natural gas (LNG) shipments and calmed supply fears ahead of winter.
European gas storage levels currently stand at 54%. This inventory remains below historical averages for this time of year.