European Gas Prices Soar on Hormuz Tensions and Supply Woes

European natural gas prices surged on Monday for the fourth consecutive session, fueled by rising geopolitical tensions in the Persian Gulf and tighter supply conditions. The benchmark Dutch front-month gas futures climbed 1.83% to 62.55 euro per megawatt-hour, marking their highest level since July 24.

In the UK market, British wholesale gas contracts jumped more than 2% to 154.01 pence per therm, also reaching their loftiest intraday level since July 24. This price surge comes as traders respond to heightened risks in the Strait of Hormuz and Washington's warnings that it could enforce a full naval blockade on Iranian ports.

The EU underground gas storage was reported at just 59% of capacity, described as a historic low for mid-August. Intense summer heatwaves have increased gas burn for power generation and cooling, while delayed LNG arrivals have limited the availability of molecules for storage.