European Gas Prices Climb on LNG Supply Concerns
European natural gas prices rose Monday as heightened security risks around the Strait of Hormuz raised concerns over liquefied natural gas (LNG) supply flows from the Persian Gulf, and gas storage levels remained below the five-year seasonal average.
The November contract at the Dutch-based TTF, the benchmark for European natural gas pricing, settled at €74.76 per megawatt-hour on Friday. Prices rose 0.4% from the previous close to €75.07 per megawatt-hour.
The increase was driven by concerns over LNG shipments from the Persian Gulf amid heightened security risks around the vital energy chokepoint.
The Strait, which handled roughly a fifth of global oil and LNG trade before the war, has seen attacks on vessels in recent weeks, raising concerns over the security and reliability of shipments from the region.
The United Kingdom Maritime Trade Operations (UKMTO) said an oil tanker was struck by an unidentified projectile in the Strait of Hormuz. Iranian media also reported hearing explosions near Qeshm Island in the strait.
Meanwhile, Iran’s Deputy Foreign Minister for Legal and International Affairs Kazem Gharibabadi said Tehran was reviewing a message conveyed by the United States through intermediary countries regarding Iran’s seven-day plan to reopen the Strait of Hormuz.
Iranian Foreign Ministry spokesman Esmaeil Baghaei also said there were additional points regarding the latest US proposal that would be conveyed to the other side.
According to Gas Infrastructure Europe (GIE) data, natural gas storage facilities in European Union countries were 72.4% full.
The level is below the five-year seasonal average of 87% for the same period.
As Europe seeks to replenish gas stocks ahead of winter, inventories lagging seasonal norms raise concerns that prolonged supply disruptions could further tighten the market.
Analysts said a colder-than-expected start to the heating season could increase gas demand and put additional upward pressure on prices. Oil Prices Ease on Supply Boost Expectation, Brent Dips to $101
