European natural gas prices jumped more than 2% on Thursday, reversing a recent slide as persistent supply bottlenecks outweighed tentative diplomatic progress in the Middle East. Dutch and British benchmark contracts both climbed, even as reports of an Iran-Oman transit deal briefly eased risk premiums. Traders are watching slow European storage injections and Gulf shipping delays as the key drivers heading into winter.
European natural gas prices rebounded on Thursday, reversing recent dips as underlying supply bottlenecks and sluggish storage injections reasserted themselves over diplomatic headlines from the Middle East. Benchmark Dutch front-month futures climbed 2.2% to trade around 54.50 euros per megawatt-hour. Britain's equivalent wholesale gas contract surged over 2.4% to 134.20 pence per therm, recovering after touching three-week lows in the prior session.
Risk premiums briefly eased after reports emerged of an interim agreement between Iran and Oman on safe transit routes. However, physical liquefied natural gas (LNG) traffic through the Strait of Hormuz remains heavily constrained. As a result, shipping delays continue to impede summer deliveries from key Persian Gulf suppliers like Qatar, keeping global supply balances tightly stretched. This structural bottleneck is hampering Europe's efforts to prepare for the upcoming winter heating season.
European Union storage facilities enter August filled to roughly 55% capacity, lagging behind historical five-year averages and marking one of the slowest seasonal injection paces in recent years. The shortfall has been compounded by unseasonably hot summer weather across central and southern Europe, which has driven peak cooling demand and forced utilities to burn gas for power generation rather than diverting it into underground caverns.
With fierce competition from Asian importers for uncommitted spot LNG cargoes, European gas desks expect prices to maintain a structural floor until storage levels show clear signs of accelerating toward seasonal targets ahead of November.
Source: Investing.com
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