European Gas prices have fallen significantly following the de-escalation of the situation in the Middle East: at just over EUR 32 per MWh, the TTF reference price is now only slightly above this year's low at the end of April, Commerzbank's commodity analyst Barbara Lambrecht notes.

European Gas prices likely to benefit from economic upturn in Europe

"Abundant imports are providing relief, bringing European Gas storage levels back up to 65%. The gap to the usual level has narrowed by three percentage points since the end of May to just under 9.5%."

"In its latest Gas market report, the IEA points out that Europe, which recorded a significant 6.5% increase in Gas demand in the first half of the year due to the increased use of Gas-fired power plants, has benefited from rather weak Gas demand in Asia, while at the same time LNG supplies from the US and the Middle East are growing. This year, LNG supply is expected to increase by 5.5% (or 30 billion cubic metres), and by a further 7% (or 40 billion cubic metres) next year, the strongest growth since 2019."

"Due to the recent faster filling of Gas storage facilities, the currently moderate LNG import demand from Asia and the simultaneous abundant increase in supply, we have revised our price forecast for the end of 2025 downwards to EUR 35 per MWh (previously EUR 45). In the medium term, however, European Gas prices are likely to benefit from the slight economic upturn in Europe and a corresponding recovery in industrial Gas demand, especially as LNG demand in Asia should pick up again in the medium term."