European natural gas prices climbed to a four-month high on Monday before trimming gains in after-hours trade as escalating hostilities in the Middle East stoked fears of long-term supply disruptions.
The front-month Dutch TTF contract rose by 1.925%to 58.500 euros ($66.77) per megawatt-hour, while the front-month UK NBP contract rose 1.441% to 140.750 British pence ($1.89) per therm.
European benchmark gas futures briefly touched 60.5 euros/MWh, their highest level since February, before easing back to around 58.5 euros/MWh as traders assessed the risks to global energy flows, according to Trading Economics.
The benchmark contract had already gained nearly 18% last week as concerns mounted that renewed attacks on vessels transiting the Strait of Hormuz would reverse improvements in gas supply seen earlier this month, ANZ analyst Daniel Hynes said.
Higher global gas prices are also complicating Europe's efforts to replenish storage ahead of winter, as stronger Asian demand draws flexible LNG cargoes away from the region.
Asia received 6.0 million tonnes of LNG across 95 cargoes last week, the highest weekly total since the first quarter and more than 15% above the four-week average, according to Vortexa. Deliveries to China posted their strongest week in months, lifting the country's 28-day moving average comfortably above 2025 levels, the analytics firm said.
Meanwhile, Europe's storage position remains well below historical norms. EU gas storage facilities ended last week 54% full, around 15 percentage points below the five-year average, while LNG send-out remained below 3,000 gigawatt hours per day, the lowest level since October 2024, Vortexa said.
Gas Infrastructure Europe data showed inventories at 53.73% of capacity on Monday, compared with 64.34% a year earlier. Data from the Swiss Federal Office of Energy also showed inventories below the five-year average of 59.2% for this time of year.
Part of the storage shortfall reflects weaker LNG arrivals. Europe imported 1.3 million tonnes of LNG across 25 cargoes last week, down 15% from the four-week average, according to Vortexa.
The continent's rolling 28-day average LNG imports are now about 30% below year-earlier levels as Atlantic Basin cargoes continue to be diverted to higher-priced Asian markets, the firm said.
Competition for flexible LNG cargoes is expected to intensify further as Egypt ramps up imports to meet peak summer cooling demand, with July imports on track for a monthly record, Vortexa said.
Northwest Europe delivered ex-ship LNG prices averaged $18.00 per million British thermal units last week, the highest level since late March, according to Vortexa.