Europe Gas Prices Rise Driven by U.S.-Iran War Escalation
UNG•Carbon market eases
In the European carbon market, the benchmark contract was down €0.75 at €83.13 per metric ton.
European gas prices rise on Middle East war escalation
Benchmark Dutch and British wholesale gas prices were trading more than 3% higher on Friday afternoon, driven by developments in the Middle East war and their impact on energy shipments.
The benchmark Dutch front-month contract at the TTF hub was up by €2.41 at €64.31 per megawatt hour (MWh) by 1356 GMT, ICE data showed.
The British front-month contract rose by 6.40 pence to 155.85 pence per therm.
The European contract eased by 1% on Thursday and initially traded lower on Friday, on some profit-taking.
Supply concerns and storage levels keep market supported
Analysts at Engie EnergyScan said the fall was merely a technical correction driven by profit-taking, not a trend reversal.
Disruptions to exports of liquefied natural gas (LNG) could persist as the Strait of Hormuz remains closed, as indicated by QatarEnergy's extension of force majeure on LNG supplies to several Asian buyers, they added.
On Friday, U.S. missiles struck targets across Iran, reaching as far as its Caspian coast, after President Donald Trump vowed "major military punishment" for Tehran and its Houthi allies.
The Dutch front-month contract is up over 35% since July 7 and trading at its highest level since January 2023 on a settlement basis, with elevated geopolitical uncertainty likely to remain the primary driver of market direction, gas analysts at LSEG said.
"If the blockade of the Strait of Hormuz continues, the price could well keep rising, especially since Europe will need to further fill its gas storage facilities," analysts at Commerzbank said.
