UK Natural Gas Extends Decline

UK natural gas prices dropped to around 134 pence per therm on Wednesday, marking a third consecutive day of declines and the lowest level since July 16, 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.

UK natural gas prices rose past 145 pence per therm on Tuesday, recovering from the previous session's losses amid uncertainty over renewed US-Iran diplomacy following mixed signals from both sides. President Trump said on Monday that talks were underway, warning that Iran had a last chance to reach a deal and avoid large-scale air strikes. Tehran, however, denied holding talks with Washington, although it said discussions with Oman to ensure safe passage through Hormuz were progressing. Another reported attack on a commercial vessel in the waterway further highlighted ongoing security risks. The conflict has disrupted roughly one-fifth of global LNG supply, intensifying competition between European and Asian buyers for cargoes and slowing the pace of Europe's gas storage replenishment. European storage levels have fallen to their lowest for this time of year in nearly two decades, heightening concerns over the region's gas supply security as the heating season draws closer.

UK natural gas prices dropped more than 2% to around 141 pence per therm on the first trading day of August 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 added that negotiations between the parties are set to begin later today, providing some relief after days of escalating tensions that had driven energy prices sharply higher. However, traders remain on edge after an explosion was reported near a tanker off the coast of Oman. UK natural gas prices soared more than 38% in July as 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, lagging behind the pace needed to meet pre-winter targets before the heating season begins in November.