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EMEA Natural Gas Update: Futures Rally Amid Escalating US-Iran Conflict, Persistent Heatwave

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European natural gas futures rallied on Tuesday, touching a four-month high, amid relentless US strikes against Iran and Tehran's retaliatory attacks against neighboring countries.

The front-month Dutch TTF contract rose by 1.95% to 59.890 euros ($68.35) per megawatt-hour, while the front-month UK NBP contract rose 2.68% to 145.250 British pence ($1.94) per therm.

On Monday, US Central Command said in a post on X that it had conducted its tenth consecutive day of strikes against Iran, targeting the country's "military command centers, maritime capabilities, missile and drone launch sites, and air defense systems."

This was done in a bid to weaken Tehran's ability to continue targeting commercial vessels transiting via the Strait of Hormuz.

Iran's Revolutionary Guard said that the country had targeted US military bases across Jordan, Bahrain and Kuwait, in retaliation against Washington's bombing campaign, according to Al Jazeera.

However, a senior Iranian official reportedly said that Tehran received a mediator-backed proposal for a 10-day ceasefire, as reported by.

Meanwhile, commercial vessel transits along the strategically crucial Strait of Hormuz, which accounted for one-fifth of global LNG flows, held steady at 13, according to data from ShipFinder.

Daniel Hynes, a senior commodity strategist at ANZ, warned that Europe's position is becoming increasingly precarious ahead of winter.

This is because the region continues to grapple with low inventories while facing intensifying competition from Asian buyers, including China, Bangladesh and Pakistan, which were ramping up spot purchases, according to the analyst.

European inventories stood at 54% of capacity, compared to 64.7% 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 69.5%, according to the Swiss Federal Office of Energy.

This comes at a time when parts of the continent continued to experience unprecedented heatwaves, with forecasts pointing to a potentially record-shattering 45 to 47 degrees Celcius this week across the Iberian Peninsula, especially Spain, due to heated air being drawn directly from the Sahara Desert, according to Severe-Weather EU.

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