Dutch and British wholesale gas prices rose sharply on Thursday, buoyed by tensions between the US and Iran that could impact shipping of liquefied natural gas (LNG).
The benchmark Dutch front-month contract at the TTF hub was up €3.25 at €32.70 per megawatt hour (MWh), or $11.31/mmBtu, by 08:35 GMT, LSEG data showed.
The British day-ahead gas prices rose by 7.75p to 79p per therm. Iran issued a notice to airmen (NOTAM) that it plans rocket launches in areas across its south on Thursday, while the US has deployed warships near Iran.
The US said on Wednesday that the two sides were still far apart on some issues after US-Iran talks in Geneva on Tuesday. European natural gas prices are rallying, with geopolitical risks growing in the Middle East, analysts at ING Research said in a note.
The concern for the gas market is any potential disruptions to liquefied natural gas (LNG) shipments through the Strait of Hormuz, especially from the world's second largest supplier Qatar, they added.
Milder weather forecast for Europe from the weekend onwards is mitigating some of the geopolitical upside, said Arne Lohmann Rasmussen, chief analyst at Global Risk Management.
EU gas storage sites were last 32.5 per cent full, compared with 43.3 per cent at the same time last year, Gas Infrastructure Europe data showed.
Meanwhile, the Italian Government on Wednesday approved a package of measures aimed at curbing energy costs for consumers, including efforts to limit the price difference between Italian and TTF gas prices.
(Reporting by Nora Buli; Editing by Susan Fenton)