European natural gas futures rebounded to €40/MWh on Friday, recovering from a five-month low of €36.5/MWh earlier in the session, after Russian forces launched drone and missile strikes on Ukrainian gas infrastructure.
EU natural gas rebounds from five-month low
The attack heightened concerns over supply disruptions to EU nations still reliant on gas transit through Ukraine, reversing some of the week’s sharp losses. The rebound was also supported by a series of high-level summits between EU leaders, which fueled optimism that the bloc would intensify efforts to secure alternative gas supplies outside of Russia, reducing its long-term energy dependence on the country.
Meanwhile, gas prices remained under pressure throughout the week due to multiple factors, including diplomatic negotiations within the EU. Reports suggested that Brussels was considering concessions to Slovakia regarding its gas supply sources after the Slovak delegation agreed to support plans for increased EU defense spending and additional aid to Ukraine. This political maneuvering underscored the delicate balance EU leaders must strike between energy security and geopolitical commitments.
Warm weather eases demand
Additionally, unseasonably warm weather across much of Europe eased demand as the winter season drew to a close, contributing to downward pressure on prices. Lower-than-expected heating needs, combined with healthy gas storage levels, raised speculation that the EU may adopt a more flexible approach to storage targets in the coming years, further reducing immediate supply concerns. Looking ahead, market participants will closely monitor geopolitical developments, EU energy policy decisions, and any potential disruptions to key gas infrastructure as key factors influencing price direction in the coming months.
