European Natural Gas Extends Advance

European natural gas prices climbed above €57 per MWh on Friday, extending gains from the previous session as renewed tensions in the Strait of Hormuz raised uncertainty over the resumption of LNG flows from the Persian Gulf. Iranian state media reported that naval forces had conducted an operation against "hostile targets" near the strait following explosions heard on Qeshm Island. Tehran is also reportedly seeking to restrict US and Israeli vessels from transiting the waterway under a proposed agreement with Oman, while demanding compensation from countries it considers hostile before allowing passage. European gas prices recovered most of the losses recorded earlier in the week following the reports. Continued disruptions to LNG shipments from key exporters such as Qatar have kept global supply balances tight, intensifying competition with Asian buyers for available cargoes and hampering Europe's winter stockpiling efforts.

European natural gas prices rose above €53 per MWh on Thursday after falling to a three-week low in the previous session, amid persistent concerns over the outlook for gas supplies. Although risk premiums eased after Iran announced it had reached an agreement with Oman on a proposed shipping route through the Strait of Hormuz, LNG supply risks remained elevated. Gas shipments through the key waterway continue to face significant disruptions, delaying cargoes from major exporters such as Qatar. These delays have complicated Europe's winter stockpiling efforts, while strong competition from Asian buyers has further tightened LNG availability. At the same time, unusually hot weather across central and southern Europe has added to market pressures by increasing electricity demand for air conditioning. EU gas storage facilities are currently just under 58% full, the lowest seasonal level in nearly two decades for this time of year.

European natural gas prices fell to €52.4 per MWh on Wednesday, extending losses for a third straight session and reaching the lowest level in three weeks, as markets weighed prospects of a renewed Middle East deal that could reopen the Strait of Hormuz and restore gas supplies from the Persian Gulf. Qatar said mediation efforts between the US and Iran have reached an advanced stage, with a draft proposal already prepared, while American officials expressed optimism that an agreement could soon be reached. However, concerns persist in Europe amid low gas inventories, with the region’s storage levels now at their lowest for this time of year in almost two decades. With roughly one-fifth of global LNG supply still disrupted by the conflict and Asian buyers competing aggressively for available cargoes, analysts anticipate European gas prices to remain elevated, leaving the market highly sensitive to any delays or setbacks in ongoing diplomatic negotiations.