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EMEA Natural Gas Update: Futures Surge as Supply Risks, Weather Outlook Support Market

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European natural gas futures rose in after-hours trading on Friday, supported by ongoing geopolitical uncertainty, tighter LNG market conditions, and shifting weather forecasts across key demand regions.

The front-month Dutch TTF contract gained 6.337% to 50.675 euros ($58.92) per megawatt hour, while the UK NBP front-month rose 6.696% to 124.60 British pence ($1.66) per therm.

On his return from Beijing following talks with Chinese President Xi Jinping on Friday, US President Donald Trump said aboard Air Force One that his patience with Iran was "running out" and suggested he was considering whether to lift US sanctions on Chinese oil companies purchasing Iranian crude, the Associated Press reported. China is the largest buyer of Iranian oil.

Attention also remained fixed on developments in the Strait of Hormuz. Hormuzstraitmonitor.com reported that around 30 vessels transited the waterway between Wednesday and Thursday evening, marking the largest commercial shipping movement since the conflict began. The site said Iran had agreed to allow some Chinese vessels to pass and suggested that further easing would depend on communication between Beijing and Tehran.

The website also highlighted inconsistencies in diplomatic messaging following the Trump-Xi meeting. It said the US readout indicated China was interested in supporting efforts to reopen the Strait, while the Chinese statement made no reference to Iran or the waterway.

Weather factors further supported prices. Atmospheric G2 said Europe is expected to remain cool and unsettled in the near term, with a shift toward warmer and calmer conditions possible next week. Forecasts of lower wind output in Germany could reduce renewable generation and increase gas-fired power demand.

Meteorological discussions also pointed to potential extreme El Nino-driven heat patterns, raising expectations for stronger cooling demand across parts of Europe and Asia in the second half of May.

Fundamentally, European storage levels remain below last year's levels. Gas Infrastructure Europe data showed EU inventories at 35.83% of capacity, compared with 42.64% at the same point in 2025.

Meanwhile, LNG market tightness persists amid restricted flows through the Strait of Hormuz, intensifying competition between European and Asian buyers. Bangladesh is emerging as a growing source of spot LNG demand as domestic production declines, Kpler said in a Thursday social media post. According to Kpler, output has fallen due to depletion at mature fields and weaker upstream investment, adding further pressure to global supply balances.

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Market Chatter: US Sees China Boosting Oil Imports as Natural Trade Partner, Secretary Wright Says

China is set to increase its crude oil imports from the US as the world's two largest economies deepen energy ties amid significant global supply disruptions, CNBC reported on Friday, citing US Energy Secretary Chris Wright."There's a natural energy trade there," Wright was quoted as saying, noting that the US is the world's largest producer while China remains the top importer. "I suspect we'll see a growth in their oil imports from the United States."The blockade of the Strait of Hormuz amid the ongoing Middle East conflict has paralyzed exports from the Persian Gulf, a region that traditionally supplies the bulk of China's oil.On Thursday, President Trump said that China had agreed to increase its purchases of American crude. Though Chinese officials have not yet confirmed the existence of a formal agreement, Trump said that Chinese vessels would soon be dispatched to terminals in Texas, Louisiana, and Alaska.The US Department of Energy didn't immediately respond to' request for comment.The global energy landscape was upended by the US-Israeli alliance's attack on Iran late in February.Iran blocked the Hormuz in retaliation, triggering what industry analysts call the most severe energy disruption in history. The strategic waterway previously handled about 20% of the world's oil supply.Secretary Wright said the Strait's strategic importance would permanently diminish as a result of the conflict. "This is a card you can play once," he said in reference to Iran's blockade.To mitigate future risks, Wright said that Gulf Arab states are expected to invest heavily in infrastructure that bypasses the waterway.The UAE has already unveiled plans to accelerate the construction of a new West-East pipeline to ensure exports can reach global markets without passing through the Strait.In the near term, Wright said China is expected to focus its purchases on the US Gulf Coast, with potential for increased shipments from Alaska as the Trump administration moves to expand production in the region.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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Global Oil Buffers Erode as Inventory Draws Accelerate Amid Middle East Supply Disruptions, Kpler Says

Global oil markets are rapidly losing the inventory buffers that initially cushioned the impact of disruptions to Middle Eastern crude supplies, raising the risk of sharper stock draws and tighter fuel markets through the summer, Kpler analyst Yui Torikata said in a blog post on Friday.The report said surplus barrels, floating storage, and oil already in transit helped absorb the early shock from disruptions linked to the Strait of Hormuz, but those buffers are now largely depleted, leaving commercial inventories as the "final line of defense."Analysts estimate the global crude market swung from a surplus earlier this year into a deficit of roughly 2.6 million barrels per day in May, driven by lower Middle Eastern production and refinery disruptions across Asia. However, the full scale of the deficit has not yet appeared in observable inventory data, suggesting additional drawdowns from underground storage or deeper refinery run cuts, particularly in China.Global onshore crude inventories have fallen by roughly 130 million barrels from post-pandemic highs to around 3.6 billion barrels, while oil-on-water volumes also declined sharply following the initial supply shock.Japan and South Korea were identified as among the most exposed consumers. Japan has drawn more than 70 million barrels from inventories since the conflict began and is now relying heavily on stockpiles to sustain refinery operations. South Korea has also reduced refinery throughput and may face further inventory draws despite planned strategic reserve releases.The report said the market is also facing a growing quality mismatch as refiners struggle to replace medium-sour Middle Eastern crude with lighter US grades. While US exports have surged to record highs, lighter crude yields lower levels of diesel and jet fuel, creating structural shortages of middle distillates.Analysts estimate global gasoil shortages could exceed 500,000 barrels per day in June, while jet fuel deficits may surpass 450,000 barrels per day.Europe has increasingly turned to US crude imports to offset reduced Middle Eastern flows, but the shift toward lighter grades is expected to strain refinery economics and increase reliance on imported diesel and jet fuel.The report said oil futures curves, rather than outright crude prices, may provide the clearest signal of tightening physical supply conditions. Analysts expect deeper backwardation to emerge as inventories continue to decline, even as flat prices are restrained by fears of demand destruction and the possibility that a ceasefire will ease supply disruptions.

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US Industrial Natural Gas Demand Seen Reaching Record Highs Through 2027, EIA Says

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