European and British wholesale gas futures rose on Monday as strikes on Gulf tankers and colder weather forecasts for Northwestern Europe outweighed unconfirmed ceasefire reports. EU storage sits at roughly 73% capacity, below historical benchmarks for October.
European and British wholesale natural gas futures moved higher on Monday, as maritime strikes in Middle Eastern shipping lanes and lower temperature forecasts for Northwestern Europe outweighed unconfirmed ceasefire headlines.
The benchmark Dutch front-month contract rose 1.7% to 82.83 euros per megawatt-hour, moving further into multi-month highs. In Great Britain, the equivalent contract gained 1.8% to 206.15 pence per therm, matching its highest level in nearly three weeks.
Gulf tanker strikes keep LNG supply tight
Energy trading desks cited security risks around Persian Gulf shipping routes as the primary driver of the rally. A fresh wave of drone and missile strikes on commercial tankers has kept war-risk insurance premiums elevated, curbing hopes for a smooth recovery in seaborne liquefied natural gas shipments.
However, the unconfirmed weekend reports of a potential energy ceasefire framework in Eastern Europe have not changed physical flows. Trade through key maritime chokepoints remains severely constrained.
LNG carriers are increasingly forced into longer voyages around Africa. As a result, Western European regasification terminals face scheduling delays.
Cold forecasts test storage at 73%
Weather models now point to cooler-than-average temperatures heading into the second half of October. The chill is projected to bring forward heating demand and power generation, which could slow storage injections as the season closes.
EU underground storage sits at roughly 73% capacity. Inventories have recovered from late-summer lows but remain below historical benchmarks for this point in October. Network operators warn that a severe cold snap in November or December could trigger rapid drawdowns and a fresh price spike.
UBS strategists said winter weather expectations will drive near-term price swings, but broader market balances should remain manageable unless winter proves substantially colder than normal. They added that much of the current rally is already priced into forward curves.
Source: Investing.com
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