UK Natural Gas Prices Remain at July-2024 Lows

UK natural gas futures dropped to around 123 pence per therm, retreating from a more than three year high of 156.6 in March, as traders increased bets that the Iran war could ease after President Donald Trump signaled a possible US exit within two to three weeks. He suggested a deal with Tehran may be reached but is not essential for ending the conflict. Energy markets have remained volatile since the war began, with the Strait of Hormuz largely blocked and key supply routes disrupted. Any de escalation could allow flows to gradually resume, though recovery may be slow given damage to infrastructure and uncertainty over shipping activity. About a fifth of global LNG normally passes through the strait, where traffic has nearly halted since late February. Meanwhile EU officials warned of prolonged disruption and are considering reintroducing crisis measures used during the 2022 energy shock.

UK natural gas futures edged up to around 138 pence per therm as supply risks countered softer demand, with geopolitical tensions remaining in focus. President Donald Trump said a deal to end military operations in Iran is likely but warned of major strikes on key infrastructure including Kharg Island if the Strait of Hormuz is not reopened. About a fifth of global LNG normally passes through the Strait of Hormuz, but traffic has nearly halted since strikes on Iran began on February 28. With little sign of de-escalation, geopolitical tensions continue to support prices despite weaker near-term fundamentals. Gains remain limited as Europe benefits from stronger wind generation and milder temperatures, which are expected to reduce power sector demand in early April. Still, UK gas prices have surged roughly 75% over March, reflecting ongoing strain in energy markets as the blocked strait disrupts key supply routes.

UK natural gas futures dropped to 138 pence a therm, extending losses for a second session after President Donald Trump announced a five day pause on US strikes against Iranian energy infrastructure following discussions aimed at ending the conflict. Trump said talks had been productive and would continue through the week, raising hopes of de escalation. Energy markets have been volatile since the war began, with the Strait of Hormuz largely blocked, disrupting key supply routes. A potential easing of tensions could allow some flows to resume, though much depends on whether shipping activity returns. Last week, both sides carried out a series of strikes targeting energy infrastructure, including Qatar’s Ras Laffan facility, the world’s largest LNG plant. Meanwhile, global LNG exports fell to a six-month low, underscoring tightening supply conditions. Shipments dropped roughly 20% to 1.1 million tons, driven mainly by declines from Qatar and, to a lesser extent, the UAE.