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EMEA Natural Gas Update: Futures Edge Higher Following Latest Hormuz Ship Attack

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European natural gas futures edged higher on Friday, after a vessel was attacked in the Gulf of Oman on Thursday, elevating tensions yet again.

Front-month Dutch TTF futures were up 0.17%, at 40.475 euros ($46.13) per megawatt-hour, while UK natural gas was up 0.38%, at 96.890 British pence ($1.28) per MWh.

On Thursday, the United Nations International Maritime Organization said that it had suspended its evacuation operations through the Strait of Hormuz, after a Singaporean commercial vessel was attacked.

IMO's Secretary-General, Arsenio Dominguez, said that the decision was taken "to reconfirm that the necessary safety guarantees continue to be in place," while noting that the vessel, which came under attack, did not abide by the IMO's evacuation framework.

Traffic along the strategically crucial Strait, which accounted for one-fifth of global LNG flows, continued to remain elevated, with 12 vessels transiting over the past 24 hours, and 15 currently making the treacherous voyage, according to the Hormuz Strait Monitor.

According to Daniel Hynes, a senior commodity strategist at ANZ, this included two cargoes loaded with LNG from Qatar's Ras Laffan export facility. He, however, noted that the latest attacks would likely lead to exporters re-evaluating their plans for the short-term, which could add to supply constraints.

All of this comes at a time when European gas inventories remain depleted, at just 47.43% of capacity, compared to 56.91% during the corresponding period a year ago, according to Gas Infrastructure Europe.

Inventories were also significantly below the five-year average for this period, at 62.00%, according to the Swiss Federal Office of Energy.

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