Europe gas prices remain at four-month intraday highs amid LNG competition, Middle East tensions

In the European carbon market, the benchmark contract CFI2Zc1 was down €0.44 at €86.19 per metric ton. The benchmark Dutch gas price pared back initial gains on Thursday morning but both Dutch and British gas remain at four-month intraday highs amid competition for liquefied natural gas (LNG) and a widening of the U.S.-Iran war. The benchmark Dutch front-month contract at the TTF hub TFMBMc1 eased by €0.16 to €62.49 euros per megawatt hour (MWh) by 0839 GMT, ICE data showed. The British front-month contract NGLNMc1 rose by 0.87 pence to 152.30 pence per therm. Prices hit a fresh four-month intraday high earlier in earlier trade but have eased since, which one trader attributed to some profit-taking. Based on closing prices, the TTF contract is now trading at its highest level since January 2023. "Strong LNG demand from Asia and relatively low European gas storage levels forced European buyers to bid more aggressively for cargoes," analysts at Mind Energy said. The continued loss of Qatari liquefied natural gas (LNG) supply due to the closure of the Strait of Hormuz is keeping the gas market tight, increasing competition for alternative cargoes. EU gas storage sites were last 54.4% full, compared with 65.4% at the same time last year, Gas Infrastructure Europe data showed. On Wednesday, Europe's largest domestic supplier of natural gas, Equinor, said that Europe was unlikely to hit a target to fill gas storage sites to 80% of capacity before the winter. Meanwhile, tensions in the Middle East continue to flare with Iranian-aligned Houthis striking two Saudi oil tankers as part of a naval blockade on Saudi Arabia, threatening to create a second choke point for global oil supplies, and the U.S. bombed Iran for a 12th consecutive night. U.S. President Donald Trump vowed to destroy an Iranian bridge or power plant every time Iran shoots at a ship in the Strait of Hormuz, raising the stakes in the war with Iran. "The absence of active negotiations between Washington and Tehran leaves the market confronting a conflict with few visible off-ramps, increasing the premium attached to every shipping incident," analysts at Engie EnergyScan said. Meanwhile, EU ambassadors have reached a political agreement on the 21st sanctions package against Russia, including a one-year exemption allowing the transfer of Russian LNG to third countries, with automatic renewal.

Europe gas prices remain at four-month intraday highs amid LNG competition, Middle East tensions

European carbon prices

European gas prices hold near four-month intraday highs

LNG demand and low storage levels keep the market tight

Middle East tensions and sanctions add to supply concerns

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