Benchmark British and Dutch wholesale gas prices rose as concerns heightened again about the escalation of tensions between the US and Iran, as well as declining wind output. The benchmark Dutch contract for March at the TTF hub rose by €2.00 to €33.30 per megawatt hour, or $11.54/mmBtu, by 09:14 GMT, LSEG data showed.
The Dutch April price was up €0.80 at €31.05/MWh. The British day-ahead contract was up 2.62 pence at 83.05 p/therm.
Prices had been falling so far this week after US President Donald Trump said Iran was "seriously talking" with Washington at the weekend which calmed fears of conflict. That has changed after an Iranian drone was shot down by US military and Iran approached a US tanker, a gas trader said.
"The market seems sensitive to any sense of change of direction in the trajectory of travel of US-Iran relations," the trader added.
The US military on Tuesday shot down an Iranian drone that "aggressively" approached the Abraham Lincoln aircraft carrier in the Arabian Sea, the US military said, in an incident first reported by Reuters.
Separately, in the Strait of Hormuz between the Persian Gulf and the Gulf of Oman, a group of Iranian gunboats approached a US-flagged tanker north of Oman, maritime sources and a security consultancy said.
Nuclear talks between the US and Iran are expected to take place in Oman on Friday, a regional diplomat said. Trump has warned that "bad things" would probably happen if a deal could not be reached.
In north-west Europe, average temperatures are expected to rise over the coming days but forecasts show colder weather could be back towards the end of next week, LSEG data showed.
Wind power generation is also declining. Lower wind output typically increases demand for gas from power plants.
US natural gas futures had also rose on Tuesday due to a small decline in output, increased gas flows to LNG export plants and higher forecast demand.
(Reporting by Nina Chestney)