Gas prices climb again as European storage remains thin ahead of winter

Natural gas prices in Europe climbed again on Monday, rising roughly 8 percent and pushing spot values close to €60 (about $70) per megawatt-hour as traders reacted to renewed uncertainty over shipping through the Strait of Hormuz.

Futures on the Dutch TTF market moved up to nearly $70 per megawatt-hour, recovering most of the losses recorded the previous week as market participants priced in a higher risk premium for supply.

Diplomatic efforts aimed at securing uninterrupted passage through the strategic waterway faltered over the weekend: Iran and Oman did not reach a final agreement after Tehran submitted an updated list of demands to Washington, conditioned on a full reopening of the route.

Tehran indicated that a deal could be within reach but cautioned it would not lead to an immediate reopening of the Strait of Hormuz, and it again rejected the prospect of direct talks with the United States. That stance has left shippers and buyers unsure about the timing of any resumption in flows.

Supply squeeze raises pressure on European storage

Prolonged uncertainty over shipments of liquefied natural gas (LNG) through the strait has raised concerns that disruptions could persist, delaying cargoes from major exporters such as Qatar. Those delays have tightened the global gas balance, intensifying competition between European and Asian buyers for available volumes.

The result is added difficulty for European countries trying to refill underground storage ahead of the cold season: tighter supply and higher prices make it harder and more expensive to bring inventories up to comfortable winter levels, leaving gas among the continent's top energy worries.

Photo: press material from the event