UK Natural Gas Prices Stabilize Amid Middle East Diplomatic Progress

UK natural gas prices hovered around 162 pence per therm on Thursday after two consecutive declines, as investors assessed diplomatic progress in the Middle East. The agreements between Iran and Oman on sharing control and revenues from the Strait of Hormuz have brought some stability to the region.

However, Tehran stressed that the deal does not imply an immediate reopening of the waterway and warned that it will remain closed unless the US ends its war, raising uncertainty over when supply conditions will improve. Continued restrictions in the strait have disrupted LNG flows from the Persian Gulf, causing severe delays to shipments from major exporter Qatar.

Extreme summer heat has boosted demand for gas-fired power generation, leaving European gas storage at just 63% full, the lowest level since 2009. As a result, prices are likely to remain volatile, particularly if supply disruptions persist into the heating season.