Dutch and British gas contracts firmed on Monday as warmer weather was expected in Central Europe, raising demand for gas to power, while ship tracking showed gas tankers were attempting to transit the Strait of Hormuz during peace talks between the US and Iran.
The benchmark Dutch front-month contract at the TTF hub was up €0.65 at €42.80 per megawatt hour (MWh) by 08:37 GMT, ICE data showed.
The British spot contract was up 1.64p at 102.7p per therm.
Prices are likely to strengthen further today following news of an explosion at a facility in Qatar's Ras Laffan Industrial City that could delay the restart of production, said LSEG analyst Yuriy Onyshkiv.
Rising temperatures across western Europe this week could also constrain French nuclear output, increasing gas-fired generation demand and posing an upside risk to prices, he added.
Sideways wind and solar forecasts are expected to slightly lift the gas for power demand forecast in Britain on the day-ahead by two mcm/d to 55 mcm/d, LSEG data showed.
French nuclear reactor Golfech two is expected offline later this evening due to high river temperatures, operator EDF said, making it the first reactor offline due to the heatwave.
Prices opened above Friday's close as there is still uncertainty and scepticism, but negotiations that went ahead over the weekend are reported to have shown some positive result and progress seems to have been made, analysts at Denmark's Mind Energy said in a note.
"Traffic through the Strait of Hormuz surged to their highest level since the start of the war, following the 60-day truce, though mine clearance and insurance reinstatement remain key hurdles for full normalisation," analysts at Engie EnergyScan said in a note.
Four more LNG ships have entered the Strait of Hormuz with their AIS signals on, which is different from the first three to enter since Iran declared the strait shuttered again late last week, Wood Mackenzie Gas and LNG director Tom Marzec-Manser wrote on social media.
EU gas storage sites were last 46.4 per cent full, compared with 55.4 per cent at the same time last year, Gas Infrastructure Europe data showed.
(Reporting by Forrest Crellin; Editing by Janane Venkatraman)