European natural gas futures extended gains in after-hours trading on Wednesday as escalating conflict in the Middle East heightened concerns over global LNG supplies and Europe's ability to rebuild gas inventories ahead of winter.
The front-month Dutch TTF contract rose 4.713% to 62.475 euros ($71.29) per megawatt-hour, while the front-month UK NBP contract gained 4.607% to 151.230 British pence ($2.02) per therm.
The latest rally followed comments by US President Donald Trump, who said in a Truth Social post that the US would strike Iranian infrastructure, including bridges or power plants, if Tehran attacked commercial vessels transiting the Strait of Hormuz.
Asian LNG prices also moved higher, strengthening competition between Asian and European buyers for spot cargoes.
ANZ analyst Daniel Hynes said North Asian LNG prices had climbed to their highest level since late March as the US and Iran exchanged strikes for a tenth consecutive day. The prolonged conflict has increased uncertainty over when LNG shipments through the Strait of Hormuz could return to normal, prompting importers such as Pakistan and Bangladesh to secure some of their most expensive LNG cargoes in years.
Like Europe, Asia is also experiencing stronger gas demand due to above-normal temperatures.
The surge in Asian buying has heightened concerns that Europe could struggle to replenish gas inventories before the winter heating season.
Equinor Chief Executive Anders Opedal told Reuters that Europe is likely to miss its target of filling gas storage facilities to 80% of capacity before winter because of tight global LNG markets and stronger competition from Asian buyers. He said European storage levels are currently at their second-lowest point in 15 years. His comments came after Equinor reported its highest quarterly profit since early 2023.
Goldman Sachs has also become more cautious on Europe's storage outlook. According to comments reported by Hellenic Shipping News, the bank now expects European Union gas inventories to reach about 67% of capacity by Oct. 31, down from its previous forecast of 74%.
Reflecting tighter market fundamentals, Goldman raised its Dutch TTF price forecasts to an average of 60 euros per megawatt-hour for the third quarter and 53 euros/MWh for the fourth quarter, up from previous estimates of 41 euros/MWh and 40 euros/MWh, respectively.
Meanwhile, EU gas storage facilities were 54.2% full, according to Gas Infrastructure Europe, compared with 65.1% at the same point last year. Inventories also remain well below the five-year average of 69.7% for this time of year, according to data from the Swiss Federal Office of Energy.