UK Natural Gas Prices Fall to 3-Week Low

UK natural gas prices fell below 178 pence per therm, the lowest in three weeks, after reports that Iran could reopen the Strait of Hormuz if the US lifted its blockade of Iranian ports. Japan’s Kyodo News reported that Tehran had proposed reopening the waterway within seven days, potentially providing a basis for diplomatic discussions at the UN General Assembly. President Donald Trump is due to address the assembly and may meet Iranian President Masoud Pezeshkian. Meanwhile, reports of increasing numbers of LNG tankers and crude carriers finding alternative routes out of the Gulf have also helped ease supply concerns. Still, supply risks remain elevated, with Europe's gas storage levels remaining below the seasonal average at a time when they would typically be close to maximum capacity. Also, Norwegian gas exports remained constrained by maintenance.

UK natural gas prices rose above 184 pence per therm on Tuesday, after sliding more than 8% to a two-week low in the previous session on renewed diplomatic efforts to end the Middle East war and improving vessel flows. Investors are awaiting developments on potential talks between US President Trump and Iranian President Pezeshkian this week, as any progress toward resolving the conflict could reduce fears of prolonged disruptions to energy flows through the Strait of Hormuz. Meanwhile, reports of increasing numbers of LNG tankers and crude carriers finding alternative routes out of the Gulf have also helped ease supply concerns. Still, supply risks remain elevated, with Europe's gas storage levels remaining below the seasonal average at a time when they would typically be close to maximum capacity.

UK natural gas prices dropped below 190 pence per therm on Monday, reversing the previous session’s gains as traders monitored diplomatic efforts to end the Middle East conflict. President Donald Trump said he would probably be open to meeting Iranian President Masoud Pezeshkian, who is expected to attend the UN General Assembly later this week, though Tehran has yet to respond to the remarks. Any progress toward de-escalation could ease concerns over prolonged LNG supply disruptions. However, supply risks remain elevated, with the conflict continuing to restrict LNG shipments through the Strait of Hormuz. European gas storage facilities were around 68.5% full, still below the seasonal average. The situation is further complicated by intense competition with Asia and ongoing maintenance work on Norway’s gas infrastructure. With the heating season approaching, the market remains highly sensitive to extended supply disruptions, increasing the risk of price volatility.