European natural gas futures extended gains in after-hours trading Tuesday, with prices hovering near their highest levels in more than three years as uncertainty over energy flows through the Strait of Hormuz continued to support the market.
Front-month Dutch TTF futures rose 4.691% to 76.745 euros ($89.13) per megawatt-hour, while UK NBP futures gained 4.872% to 191.130 British pence ($2.58) per therm.
European benchmark gas prices are more than double their level a year ago and are trading near levels last seen in late 2022, when prices surged following Russia's invasion of Ukraine, Reuters said Tuesday.
The latest gains came as LNG supplies from the Persian Gulf remained severely disrupted amid the ongoing conflict between the US and Iran. Reuters reported that the disruption to the Strait of Hormuz has largely choked off a significant portion of global LNG supplies, increasing competition between Europe and Asia for alternative cargoes.
Qatar has extended force majeure on some LNG deliveries, while reduced flows through Hormuz have left European buyers more reliant on alternative supplies ahead of the 2026/27 winter heating season.
Europe's relatively low gas inventories are adding to supply concerns. Gas storage facilities across the European Union were about 66% full, the lowest level for this time of year in 15 years, according to Gas Infrastructure Europe data cited by Reuters. Inventories were roughly 12 percentage points below their level a year earlier.
European storage levels are likely to peak at only 70%-75% this year, compared with about 83% last year, when inventories reached roughly 85 billion cubic meters.
Germany is particularly exposed. The country's gas storage facilities were about 53% full as of Sept. 1, the lowest level in 15 years, according to German gas storage industry group INES.
INES warned Tuesday that German storage sites could reach only about 77% capacity by the Nov. 1 target date and that this level could be insufficient in an extremely cold winter.
The German Economy Ministry, however, said government intervention was not necessary to boost storage levels. In a document prepared for a parliamentary committee, the ministry said storage levels of 60%-70%, combined with continued import options, should be sufficient to meet expected winter demand. It also distinguished the risk of higher prices and volatility from the risk of an actual physical gas shortage.