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EMEA Natural Gas Update: Futures Rally Amid Renewed Strait of Hormuz Hostilities

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European natural gas futures rose on Thursday amid renewed tensions between the US and Iran.

The front-month Dutch TTF contract was up 1.57% to 49.790 euros ($56.93) per megawatt hour, while the UK NBP front-month contract was up 3.06% to 120.270 British pence ($1.61) per therm.

On Wednesday, US President Donald Trump said that the ceasefire between the US and Iran was over, while warning that American military strikes against Tehran would "get much worse" if the latter attacked more commercial vessels along the strategically crucial Strait, according to a CNN report.

US Central Command, in a post on X, has said that it has hit over 80 Iranian military targets since Tuesday, including 60 Islamic Revolutionary Guard Corps small boats.

Daniel Hynes, a senior commodity strategist at ANZ, noted that these recent developments further impair Europe's gas refilling efforts, with inventories at just 50.88% of capacity, compared to 60.94% 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 66.0%, according to the Swiss Federal Office of Energy.

According to Otar Dgebuadze, Vice President at JPMorgan, current European gas prices are insufficient to compete for cargoes and outbid Asian buyers.

"We expect prices to go higher for a simple reason that Europe will need to outbid Asia, and we don't see it happening at the 45 euros ($51.40) price level," he said, during the bank's LNG Speakers Series webinar.

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