European Gas Prices Rise on LNG Supply Concerns and Strait of Hormuz Uncertainty

European natural gas prices rose on Monday due to concerns over LNG supply disruptions, shipping traffic through the Strait of Hormuz, and high temperatures increasing electricity demand for cooling. The September contract at the Dutch Title Transfer Facility (TTF) settled at €61.42 per megawatt-hour (MWh) on Friday and was trading 1.4% higher at €62.26 per MWh as of 0932 GMT Monday.

The disruptions to Persian Gulf LNG supplies, combined with ongoing Israeli military strikes on Lebanon despite a ceasefire and new US threats of sanctions against Iran, have reduced expectations of an imminent agreement that could help reopen the Strait of Hormuz and alleviate supply concerns.

Gas storage facilities across the European Union were 60.8% full, according to data from Gas Infrastructure Europe (GIE), but storage levels remain below historical averages, increasing concerns over Europe's gas inventories ahead of winter targets.