European Gas Prices Rise as British Contract Heads for Third Monthly Gain

European and British wholesale natural gas prices moved higher on Wednesday as traders continued to monitor geopolitical developments in the Middle East and gas supply conditions ahead of the northern hemisphere winter.

The benchmark Dutch front-month gas contract rose 1.1% to €73.33 per megawatt-hour, extending its gains following an earlier pullback.

In Britain, the day-ahead wholesale gas contract increased 3.5% to 187.24 pence per therm.

British Gas Prices Head for 7.3% September Gain

The British wholesale gas contract was on course to end September 7.3% higher, which would mark its third consecutive monthly increase.

The supplied information cited demand from the power sector and regional export flows among the factors affecting the British gas market during the month.

By comparison, the benchmark Dutch contract was on track to finish September broadly unchanged following a month in which LNG flows and changing weather forecasts contributed to price movements.

European Gas Storage Remains Below Year-Ago Levels

European underground gas storage inventories were around 12 percentage points below their levels at the same point last year, according to the supplied information.

The lower storage level has maintained market attention on potential supply disruptions as Europe approaches the winter period.

European gas markets are also sensitive to changes in global liquefied natural gas flows, with competition for cargoes from Asian buyers representing another factor affecting supply availability.

Middle East Developments Remain in Focus

Geopolitical developments surrounding the Strait of Hormuz continued to be monitored by energy markets following the breakdown of recent ceasefire negotiations.

Brent crude remained above $106 a barrel, while traders assessed the potential implications of regional developments for global energy transportation and LNG cargo flows.

Potential changes to LNG shipping routes and competition for supplies ahead of winter remain among the factors being monitored as European gas markets enter the fourth quarter.