Natural gas futures rose in the US and Europe as a mechanical issue disrupted a US pipeline system and uncertainty over diplomatic efforts to resolve conflicts in the Middle East pressed European supply concerns.
The front-month Henry Hub futures contract rose 6.65% to $3.224 per million British thermal units, while the continuous contract rose 5.23% to $3.318/MMBtu. In late European trade, the front-month Dutch TTF futures gained 4.097% to trade at 74.960 euros ($85.29) per megawatt-hour, while the UK NBP futures contract rose 4.095% to 186.830 British pence ($2.47) per therm.
US natural gas prices surged to a 2.5-month high Thursday after TC Energy's Columbia Gas Transmission declared force majeure following an unexpected mechanical issue on its Mountaineer XPress system in West Virginia.
Barchart estimated the disruption would affect 1.8 billion cubic feet per day of firm transportation capacity, equivalent to about 1.6% of total US gas supply. Pinebrook Energy Advisors warned the outage could last up to a month, potentially stranding Appalachian production and tightening gas balances even as seasonal, weather-driven demand begins to ease.
Additionally, the Energy Information Administration reported a larger-than-expected 53-Bcf storage injection Thursday, but the build was below historical norms for a sixth consecutive week. The smaller injections have widened the year-over-year storage deficit and reduced inventories relative to the five-year average.
European gas prices also rose amid uncertainty over diplomatic efforts to resolve the Middle East conflict and reopen the Strait of Hormuz. Brent crude climbed above $105 a barrel as the UN General Assembly offered little evidence of progress toward a peace deal. An adviser to Iran's supreme leader warned that Iran and its Houthi allies could respond to further US attacks by opening a "new front," including potential strikes on energy supplies in the Red Sea, news outlets reported.