European and British wholesale natural gas prices rose around 2% on Monday, remaining close to their highest levels since late 2023 as markets assessed developments in the Persian Gulf and European gas storage levels ahead of winter.
The benchmark Dutch front-month gas contract gained 2% to trade near €73.80 per megawatt-hour, below the multi-year high of €74.32 reached last week.
In Britain, the equivalent NBP wholesale gas contract also rose 2% to around 182.50 pence per therm, compared with its 2023 high of 183.95 pence.
The price moves came as traders assessed the potential implications of developments affecting Middle Eastern energy shipping routes and the pace of European storage replenishment.
Iran plans restricted zone near Strait of Hormuz
Iranian authorities have announced plans to establish a restricted zone outside the Strait of Hormuz in the coming days. The announcement followed military activity over the weekend in which U.S. forces struck and disabled three Iranian oil tankers.
The U.S. said the strikes were carried out in response to an Islamic Revolutionary Guard Corps ballistic missile attack targeting two U.S. Navy warships in the region.
Approximately one-fifth of global liquefied natural gas traffic passes through the Strait of Hormuz, with Qatar a major source of those shipments. Restrictions affecting transit through the waterway could therefore affect LNG supplies available to international markets, including Europe.
European utilities are also competing with Asian buyers for uncommitted LNG cargoes from the Atlantic basin as they seek additional supplies.
European gas storage at about 62%
European gas storage facilities were approximately 62% full, according to data from Gas Infrastructure Europe, around 17 percentage points below the five-year seasonal average.
The source attributed slower storage injections during August to higher gas-fired electricity generation during periods of hot weather in Southern Europe, scheduled offshore pipeline maintenance in Norway and delays to Qatari LNG cargoes.
The storage position has increased the market’s focus on LNG availability during the autumn and winter, particularly if disruptions to seaborne supplies continue.
Energy prices add to focus on ECB meeting
Natural gas prices are also being monitored alongside Brent crude, which remained above $90 a barrel, as European markets assess the inflation outlook ahead of Thursday’s European Central Bank meeting.
Preliminary figures showed annual headline Eurozone inflation accelerated to 3.3% in August, with the energy component increasing 14.3%.
Money markets were pricing in a 25-basis-point interest-rate increase from the ECB at this week’s meeting.
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