European natural gas futures trimmed earlier gains on Wednesday but stayed in positive territory in after-hours trading as renewed US and Iranian military strikes ended a brief lull in hostilities, heightening concerns about winter supply levels and inventories across the Continent.
The front-month Dutch TTF contract rose 4.352% to 60.250 euros ($68.57) per megawatt-hour, while the front-month UK NBP contract gained 4.241% to 146.250 British pence ($1.94) per therm.
In earlier trade, the Dutch contract rose as high as 61.73 euros/MWh.
The rally followed a sharp escalation in regional tensions after US and Saudi fighter jets targeted Iranian-linked militias in Iraq. Iran responded with missile strikes on military bases in Jordan and attacks on oil tankers, bringing an end to a days-long lull in direct confrontation between Washington and Tehran and broadening the conflict.
The renewed violence heightened concerns over energy security in a region that remains a major source of global LNG supplies. The developments add pressure to Europe's efforts to rebuild gas inventories ahead of the winter heating season.
European gas buyers face strong competition for LNG cargoes from other markets. China's LNG imports are expected to rise for a third consecutive month as hot summer temperatures boost demand, according to ANZ analyst Daniel Hynes. July deliveries are forecast at 5.6 million tonnes, up 5.3%, following an 8.3% increase in June.
Egypt has also emerged as an active buyer in the LNG spot market as extreme heat increases consumption. Declining domestic gas production has pushed the country to rely more heavily on imports, with August delivery cargoes being sought, Hynes said.
European gas storage levels remain below historical averages. Inventories stood at 55.91% capacity, compared with 67.28% at the same point last year, according to Gas Infrastructure Europe. Storage levels were also well below the five-year average of 71.8% for this period, data from the Swiss Federal Office of Energy showed.