Benchmark Dutch and British wholesale gas prices traded in a narrow range on Tuesday morning after Iran rejected a US proposal brokered by Pakistan for an immediate ceasefire and the lifting of its effective blockade of the strait, while a US deadline loomed to open the strait.
The benchmark Dutch front-month contract at the hub was €0.19 higher at €50.24 per megawatt hour (MWh), or $17.03/mmBtu, by 08:09 GMT, ICE data showed.
The British April contract was up 0.46p at 127.36p per therm.
On Monday, US President Trump said, "the entire country can be taken out in one night and that night might be tomorrow night." He vowed to destroy Iranian power plants and infrastructure if Tehran refused to agree before the deadline.
Trump's vow at a White House press conference came ahead of a 20:00 EDT deadline on Tuesday (00:00 GMT Wednesday) that he set for Iran to comply with US conditions.
"The market is now waiting to see what will happen with the ultimatum set by President Trump...the evolution of the situation in the Middle East will obviously be crucial," said analysts at Engie's EnergyScan.
Roughly a fifth of the world's LNG typically passes through the Strait of Hormuz but shipping through the narrow waterway has come to a near-standstill since the US and Israel began strikes on Iran on February 28.
LSEG analyst Saku Jussila said that €50/MWh remains a key level and big developments would be needed to break out from the current trading range.
From a fundamentals perspective, temperatures have adjusted higher for next weekend but wind power generation forecasts are slightly lower. Supply from Norway and from liquefied natural gas remains stable.
Gas-for-power demand is expected to be 103 gigawatt hours per day higher on the day-ahead at 2,082 GWh/d as wind expectations are now quite a bit lower than they were last week.
(Reporting By Marwa Rashad; Editing by Nina Chestney)