Benchmark Dutch and British wholesale gas prices edged higher on Monday after Yemeni Houthi terrorists launched their first attacks on Israel over the weekend, widening the US-Israeli war with Iran and raising fears over supply disruptions.
The benchmark Dutch front-month contract at the TTF hub was up €1.183 at €55.36 per megawatt hour (MWh) or around $18.65 /mmBtu, by 08:10 GMT, ICE data showed.
The British April contract was up 3.61p at 139.76p per therm, ICE data showed.
Around a fifth of the world’s LNG typically transits through the Strait of Hormuz but shipping through the narrow strait has come to a near-standstill since the US and Israel began strikes on Iran on February 28.
“With little sign of de-escalation following weekend developments, geopolitical risk remains elevated and could continue to support prices across the curve, despite increasingly softer near-term fundamentals,” LSEG analyst Wayne Bryan said in a daily research note.
Oil prices rose more than three per cent on Monday to over $115 a barrel.
“European gas prices are increasing more moderately...as comfortable domestic fundamentals (higher wind generation in particular) are triggering some downward pressure,” analysts at Engie EnergyScan said in a daily research note.
In Northwest Europe temperatures were expected to be higher than seasonal norms at the beginning of April, while demand from the power sector was also expected to fall as renewable power output, such as wind, was forecast to increase, LSEG data showed.
(Reporting by Susanna Twidale. Editing by Jane Merriman)