UK Natural Gas Prices Rebound

UK natural gas prices rose toward 131 pence per therm on Thursday, rebounding from a three-week low amid persistent concerns over the outlook for gas supplies. While 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.

UK natural gas prices dropped to 128 pence per therm on Wednesday, marking a third consecutive day of declines and 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.

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.