European and British wholesale natural gas prices remained near multi-year highs on Thursday following gains in the previous session, as investors monitored the potential impact of the Persian Gulf conflict on global energy supplies.
The benchmark Dutch front-month gas contract rose 0.5% to €79.64 per megawatt-hour, remaining close to the highest level since 2023 reached on Wednesday.
In Great Britain, the equivalent NBP wholesale gas contract gained 0.6% to 198.00 pence per therm, near its highest level since late 2022.
Strait of Hormuz Risks Remain in Focus
The latest moves followed further military developments in the Middle East. Iranian-backed Houthis in Yemen launched coordinated attacks on several cities in Saudi Arabia, according to the supplied information.
The escalation followed U.S. strikes on Iranian oil tankers and a subsequent Iranian missile attack on a U.S. military base in Jordan.
The conflict has increased uncertainty surrounding maritime traffic through the Strait of Hormuz. Approximately 20% of global liquefied natural gas traffic passes through the waterway, with Qatar accounting for a substantial proportion of those shipments.
Crude oil was trading above $100 a barrel, while the possibility of restrictions on Persian Gulf shipping has increased attention on competition between European and Asian buyers for available LNG cargoes from the Atlantic basin.
European Gas Storage Around 62% Full
The supply uncertainty comes as Europe approaches the end of its summer gas storage injection period.
According to Gas Infrastructure Europe data cited in the supplied information, European underground storage facilities were approximately 62% full.
That level was around 17 percentage points below the five-year seasonal average.
Storage levels and the availability of LNG imports are among the factors affecting European gas supply ahead of the winter period.
ECB Rate Decision Due
Higher energy costs also form part of the economic backdrop to the European Central Bank’s monetary policy decision later on Thursday.
Money markets had almost fully priced in a 25-basis-point interest-rate increase, which would take the ECB’s deposit facility rate to 2.50%.
Investors will also be monitoring comments from ECB President Christine Lagarde and the Governing Council for information about the outlook for monetary policy.
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