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EMEA Natural Gas Update: Futures Surge Over 4% Ahead of US Economic Sanctions Against Iran

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European natural gas futures soared more than 4% on Monday as markets awaited a US plan to economically isolate Iran after a flurry of diplomatic efforts failed to end the war between them.

Front-month Dutch TTF futures rose 4.42% to 68.775 euros ($80.26) per megawatt-hour, while UK NBP futures gained 4.25% to 170.400 British pence ($2.33) per therm.

US Treasury Secretary Scott Bessent is scheduled to hold a press conference on Monday, after threatening to impose "the toughest sanctions in history" against Tehran during an interview with CNBC last week.

Meanwhile, Iran's security chief Mohsen Rezaei has warned that Tehran could stop all oil exports from the Gulf and treat any country's support for the sanctions as an "act of war" in retaliation, according to a report by Al Jazeera.

Traffic along the Strait of Hormuz witnessed an uptick over the weekend, with 36 vessels transiting on Saturday and 32 on Sunday, according to tracking data from ShipFinder.

Daniel Hynes, a senior commodity strategist at ANZ, noted that higher prices had done little to deter buyers in Asia, as demand continued to improve. This left Europe in a tough bind, as it wrestles with historically low inventory levels ahead of the upcoming winter.

Gas inventories across Europe stood at 61.68% of capacity, down from 75.35% 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 79.9%, according to the Swiss Federal Office of Energy.

However, things are looking up for the region on the weather front, with the UK's Met Office forecasting that 2027 could potentially surpass 2024 as the warmest winter on record, reducing heating gas demand, and easing the region's storage needs.

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Weekly Crude Gains Nearly 6% as Hormuz Disruptions, US-Iran Tensions Lift Prices

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US Natural Gas Prices Rise for 2nd Straight Week Amid Robust Weather-Related Momentum

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