TTF Gas Hits 5-week High

European natural gas prices jumped 4% to above €82/MWh on Monday, the highest level since December 2022, as tensions in the Middle East persist. Saudi Arabia has temporarily closed a critical oil pipeline after drone attacks, while an advance by Yemen’s Houthis fueled concerns over further disruptions to global energy supplies. Meanwhile, a meeting scheduled for later today between Iran and Gulf states to discuss a potential agreement to reopen the Strait of Hormuz was postponed. Europe is struggling to rebuild its gas inventories, with storage levels remaining below historical norms amid curtailed LNG supplies from the Persian Gulf, primarily from Qatar. Although the European Commission recently said there is no immediate risk to gas security this winter, a prolonged disruption to Gulf LNG supplies could tighten the global market further, forcing European buyers to compete more aggressively with Asia, potentially driving prices even higher as heating demand begins to rise.

European natural gas prices fell below €81/MWh on Friday but remained near their highest level since December 2022, amid persistent disruptions to LNG supplies from the Persian Gulf. Fighting between the US and Iran has intensified over the past two weeks, centering on who controls the Strait of Hormuz. The ongoing blockade has already disrupted around 20% of global LNG flows, primarily affecting shipments from Qatar. Europe has struggled to rebuild its depleted inventories, with storage sites around 67% full, below historical norms. While the European Commission said there's no immediate risk to gas security this winter, a sustained disruption to Gulf LNG supplies could further tighten global supply and force Europe to compete more aggressively with Asia and other buyers for alternative cargoes, potentially driving prices even higher as heating demand begins to increase. Despite Friday's decline, European gas prices are still over 11% higher this week, marking their fifth weekly gain.

European natural gas prices rose above €81/MWh on Thursday, the highest level since December 2022, amid rising concerns over the region’s gas supply outlook. European gas inventories remain below historical norms as escalating attacks in the Middle East continue to disrupt LNG shipments through the Strait of Hormuz, a critical route handling roughly 20% of global gas flows, mainly from Qatar. In the latest development, Iran said it had struck more than a dozen vessels attempting to pass through the strait and warned that it would step up attacks if Washington continued strikes on its territory, heightening fears of deeper and more prolonged supply disruptions. Meanwhile, maintenance in Norway and lower Algerian flows to Italy are also limiting pipeline supplies to Europe. These supply risks come as Europe nears the end of its summer storage injection season, threatening to further intensify competition for global gas supplies during the winter.