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EMEA Natural Gas Update: Prices Edge Up on Continued Supply Fears

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European natural gas prices pared gains in after-hours trade on Friday after hitting a three-week high, as mounting concerns over supply security added pressure ahead of winter.

Front-month Dutch TTF futures rose 0.563% to 60.740 euros ($70.33) per megawatt-hour, while UK NBP futures gained 0.70% to 149.520 British pence ($2.03) per therm.

Prices climbed more than 10% this week as a standoff between the US and Iran raised uncertainty over LNG shipments through the Strait of Hormuz, Trading Economics said. Washington has threatened to maintain a naval blockade of Iran indefinitely and increase economic pressure on Tehran after ceasefire talks stalled.

The disruption has delayed LNG cargoes from Qatar, forcing European buyers to compete more aggressively with Asian importers for limited supplies and making it harder to rebuild inventories before the winter heating season.

North Asian LNG prices were hovering around $21 per million British thermal units, ANZ analyst Daniel Hynes said Friday.

The supply outlook was further clouded by Shell's extension of an outage at Norway's Ormen Lange gas field. Output has been reduced by 40%, or 8.9 million cubic meters per day, with the extension equivalent to the loss of 11-12 LNG cargoes for Europe, AJOT Newsroom reported.

European gas inventories stood at 59.92% of capacity, well below 72.54% a year earlier and the five-year average of 76.8%, according to Gas Infrastructure Europe and the Swiss Federal Office of Energy.

Heatwaves across southern and central Europe have also lifted gas-fired power generation as demand for cooling rises, diverting more gas from storage.

French nuclear availability was set to average 36.1 gigawatts, or 57% of total capacity, this week, the lowest level since August 2023, preliminary Montel EQ data showed.

European LNG imports are expected to recover marginally this month from July's two-year low, Kpler data showed, offering some relief as the region works to replenish stocks before winter.

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