UK Natgas Prices Down 5%

UK natural gas prices dropped more than 5% to around 113 pence per therm, hitting a two-week low, after President Donald Trump indicated that a US–Iran deal was close. He also said planned US military strikes against Iran had been cancelled, noting that talks with Tehran had been elevated to the highest levels of Iranian leadership and received approval. Still, uncertainty persisted as Iran has yet to confirm. The comments came against a backdrop of earlier Trump threats to seize Iranian energy infrastructure, as well as an escalation in US–Iran hostilities earlier in the week. The lack of a material agreement continued to fuel concerns over prolonged supply disruptions through the Strait of Hormuz, which handles around one-fifth of global LNG supplies. This could intensify competition for LNG cargoes, intensifying worries in Europe as the region races to secure fuel this summer to refill its tanks before next winter.

UK natural gas futures jumped 5.5% to 123.45 pence per therm, the highest in nearly three weeks, as Iran and Israel traded missile strikes for the first time since a ceasefire was agreed in April, threatening ongoing diplomatic efforts to end the war. Israel said on Monday it struck military targets in Iran in response to missile attacks launched by Tehran, which Iran described as retaliation for earlier Israeli strikes in Lebanon. The latest strikes came despite President Donald Trump’s call for Israel to refrain from retaliatory action. The escalating hostilities have heightened fears of a more prolonged disruption to energy shipments from the Persian Gulf. The sustained disruption could intensify competition for LNG cargoes, fueling concerns in Europe as the region races to secure fuel this summer to refill its tanks before next winter.

UK natural gas futures rose more than 3% toward 119 pence per therm, as fighting in the Middle East flared up and diplomatic talks remained at an impasse. The US military said that Iran fired several ballistic missiles toward regional neighbors but failed to hit their targets, as American and allied forces intercepted missiles aimed at Kuwait and Bahrain, while the US also struck an Iranian military ground control station on Qeshm Island in response. This comes as Israel continued its attacks in Lebanon. Despite the escalation in hostilities and Iran's claims that negotiations have stalled, President Donald Trump insists that talks are ongoing. The lack of meaningful progress toward a resolution has heightened fears that disruptions to energy flows from the Persian Gulf could persist. With storage facilities currently only 38% full, the prolonged disruption complicates Europe’s efforts to refill inventories before next winter.