UK Natural Gas Slides After Trump Halts Iran Strikes

UK natural gas prices dropped more than 4% to around 138 pence per therm on the first trading day of August, the lowest in over two weeks, after President Donald Trump called off a planned weekend attack on Iran, saying Tehran and other Middle Eastern nations had assured him they were working toward a deal. Trump said that negotiations between the parties are set to begin on Monday. The announcement provided some relief after days of escalating tensions that had driven energy prices sharply higher. UK natural gas prices soared more than 38% in July as the renewed fighting heightened concerns over LNG supplies from the Persian Gulf and Europe's ability to replenish gas inventories ahead of winter. European gas facilities ended last month about 55% full, well below both the five-year average and the level recorded at the same time last year, leaving storage levels behind the pace needed to meet pre-winter targets before the heating season begins in November.

UK natural gas prices fell to around 140 pence per therm on Friday, extending Thursday’s decline amid signs of improving shipping conditions through the Strait of Hormuz despite regional tensions and steady LNG arrivals in Europe. Qatar sent its first LNG tanker through the waterway in more than three weeks, raising hopes that exports from one of the world's largest LNG suppliers could gradually resume. Increased LNG arrivals into Northwest Europe and stable pipeline flows from Norway, also helped ease supply concerns. Despite the recent pullback, UK gas prices remain more than 34% higher in July, as renewed US-Iran hostilities disrupted Persian Gulf supplies while heatwaves boosted electricity demand, limiting Europe's ability to replenish inventories ahead of winter. European storage facilities are about 55% full, below the seasonal five-year average and behind the pace needed to comfortably meet pre-winter storage targets before the heating season begins in November.

UK natural gas prices dropped to around 145 pence per therm on Thursday, paring some of the previous session's gains after reports that a Qatari LNG tanker had successfully exited the Strait of Hormuz, raising hopes that exports from one of the world’s largest LNG suppliers could gradually resume. It was the first such vessel reported to have left the waterway since one of Qatar’s tankers was attacked more than three weeks ago. However, concerns over the security of shipping through the strait persist amid renewed fighting in the region. President Donald Trump pledged a strong response after Iran attacked US bases in Jordan, following joint strikes by Saudi Arabia and Washington against Iran-backed militias in Iraq. Earlier this week, QatarEnergy extended its force majeure for European and Asian customers, intensifying competition between the two regions for available LNG cargoes. Heatwaves across Europe also boosted electricity demand, slowing the pace of gas storage replenishment.