European and British wholesale natural gas prices moved higher on Tuesday, reversing a two-session decline as traders continued to monitor Middle East developments and European gas storage levels ahead of the winter heating season.
The benchmark Dutch front-month natural gas contract rose 1.77% to €72.53 per megawatt-hour, recovering some of its losses from earlier in the week.
In the UK, the day-ahead wholesale gas contract increased 2.8% to 180.91 pence per therm.
Dutch Gas Futures Head for 3.9% Monthly Gain
Despite recent volatility, both contracts were on course to finish the month higher.
The Dutch benchmark was heading for a monthly increase of approximately 3.9%, while the British contract was on track for a gain of around 10%.
According to energy trading desks cited in the supplied material, both benchmarks have risen by more than 50% over the past two months amid geopolitical uncertainty and competition for liquefied natural gas cargoes.
Since the beginning of the year, Dutch gas futures have increased 161%, while the British equivalent has risen 142%.
Strait of Hormuz Developments Remain in Focus
Energy markets continued to monitor the situation between the US and Iran concerning the Strait of Hormuz.
Brent crude remained above $106 a barrel, while uncertainty surrounding energy transit through the Middle East continued to affect oil and gas markets.
European gas storage inventories were approximately 12 percentage points below their levels at the same point last year, according to the supplied information.
The combination of lower storage levels and the start of the winter heating season has increased attention on weather conditions and potential disruptions to energy supplies.
Traders Monitor Winter Demand and LNG Supplies
Energy trading desks cited in the supplied material said colder-than-expected weather or additional disruption to Middle Eastern energy transit could place further upward pressure on European gas prices.
Competition for LNG cargoes also remains a factor for European buyers as the region enters the winter period.
Future gas price movements will depend on factors including temperatures, storage withdrawals, LNG availability and geopolitical developments affecting global energy supplies.
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