European natural gas futures prices pared earlier gains in after-hours trading on Friday as July ended with the region's winter storage refill campaign still lagging historical levels, with geopolitical tensions weighing on supply security.
The front-month Dutch TTF contract fell 0.132% to 58.240 euros ($67.07) per megawatt-hour, while the front-month UK NBP contract gained 0.211% to 142.770 British pence ($1.92) per therm.
The contracts closed out a volatile month rising by more than 30% despite daily profit-taking and signs that disruptions to Persian Gulf energy flows could ease, Investing.com said Friday.
Market sentiment remained focused on developments in the Middle East after Friday reports that Iran's Islamic Revolutionary Guard Corps struck two commercial oil tankers traveling through the Strait of Hormuz under US military air escort and forced four other vessels to turn back.
However, Pakistan, a major buyer of Qatari LNG, had negotiated with Iran to secure safe passage for at least one Qatari shipment, ANZ analyst Daniel Hynes said, adding that the development contributed to a slight easing in North Asian LNG prices.
Additional LNG arrivals into Northwest Europe and steady pipeline flows from Norway helped alleviate immediate supply concerns, Trading Economics said. However, European gas prices remained more than 33% higher over the month as renewed US-Iran tensions disrupted expectations for stable Persian Gulf flows any time in the near future, while heatwaves across the region lifted power demand and constrained efforts to rebuild inventories ahead of winter.
European gas storage levels remained below seasonal norms. Inventories stood at 56.39% full, compared with 67.94% at the same point last year, according to Gas Infrastructure Europe. Storage levels were also well below the five-year average of 72.5% for this time of year, according to the Swiss Federal Office of Energy.