Hormuz Tensions Send European Gas Prices Soaring
European natural gas prices surged on Thursday due to heatwaves across the continent and concerns over liquefied natural gas (LNG) supplies through the Strait of Hormuz. The benchmark August contract at the Dutch Title Transfer Facility (TTF) traded at €63.58 per megawatt-hour, up 1.7% from Wednesday's close.
The TTF contract has risen more than 50% since late June, driven by persistent heatwaves and concerns over gas storage facilities reaching targeted levels before winter. Natural gas storage facilities across the European Union were 54.38% full as of Thursday, with Europe racing to refill inventories ahead of the winter heating season.
Goldman Sachs raised its short-term forecast for European natural gas prices on Wednesday, citing tensions in the Middle East that may slow the recovery of LNG exports from the Persian Gulf. The bank expects global LNG supply to decline by an annualized 16 million tonnes over the remainder of the summer.