European Gas Prices Rebound on Middle East Conflict Uncertainty

European natural gas prices rebounded on Thursday, rising towards €74/MWh amid uncertainty over the Middle East conflict. The conflict has kept the Strait of Hormuz largely closed, affecting LNG flows from the Persian Gulf.

The Iranian President, Masoud Pezeshkian, stated that Tehran would not surrender to the US but remained open to dialogue and diplomacy. He set conditions for a return to negotiations.

Europe's gas storage position remains a concern as the winter heating season approaches. Storage facilities are around 70% full, which is below the five-year seasonal average and the region's target of 80%. Goldman Sachs reiterated that there are upside risks to gas prices, warning that the European benchmark could rise above €100/MWh in peak winter if Gulf LNG exports do not increase.