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EMEA Natural Gas Update: Futures Advance Over 10% on Hormuz Uncertainty, LNG Competition

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European natural gas futures remained elevated in after-hours trading Monday as uncertainty over the reopening of the Strait of Hormuz kept LNG supply risks high.

Front-month Dutch TTF contracts advanced 10.55% to 61.41 euros ($70.93) per megawatt-hour, while UK NBP futures gained 10.98% to 150.88 British pence ($2.04) per therm.

European gas prices rose as Iran and Oman had yet to agree on reopening the Strait of Hormuz, limiting expectations for a quick recovery in LNG shipping, Trading Economics said.

The uncertainty has kept LNG cargo availability tight, with delays affecting supplies from major exporters such as Qatar and increasing competition between European and Asian buyers, Trading Economics added.

Despite storage gains, European Union gas inventories remain low. Gas Infrastructure Europe reported storage at 58.88%, down from 71.25% a year ago, with Germany at 48.18% and France at 59.99%.

In Northeast Asia, spot LNG prices for September delivery fluctuated in the low $21/MMBtu range Aug. 7 after falling to the mid-$19/MMBtu range earlier in the week as supply concerns eased and spot demand remained low, Japan Organization for Metals and Energy Security, or Jogmec, said.

European gas prices for September delivery fell to $18.80/MMBtu Aug. 7 from $19.90/MMBtu a week earlier, after concerns over a possible Hormuz reopening pushed prices lower before transportation risks, weaker Norwegian supply and lower wind generation supported a rebound, Jogmec added.

European gas remains exposed to shipping risks even if the strait reopens, as carriers may require sustained stability before returning to the route, Daniel Hynes, senior commodity strategist at ANZ Bank, said.

Traffic through the strategically important waterway, which handles about one-fifth of global LNG flows, remained steady at 12 transits on Sunday, according to ShipFinder.

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