Dutch and British wholesale gas contracts were slightly firmer on Friday morning with a reported US-Iran peace memorandum still needing final top level clearance and as the market continues to grapple with Europe's weak gas storage outlook.
The benchmark Dutch front-month contract at the TTF hub was up €0.63 at €47.60 per megawatt hour (MWh) by 08:24 GMT, data from the Intercontinental Exchange (ICE) showed.
The British front-month contract was up 1.56p at 114.99p per therm.
"Geopolitics are expected to drive the market today," LSEG analyst Dzmitry Dauhalevich said. Prices have been volatile this week with intraday swings reflecting the back and forth over a memorandum of understanding to end the US-Iran war and reopen shipping via the Strait of Hormuz, which could help rebalance global gas supply.
A latest draft agreement still needs signing off by US President Donald Trump and confirmation in Iran.
Research consultancy Energy Aspects said this week it has lifted its TTF price forecast for June to October by an average €4.2/MWh after below-average storage injections in May.
Storage filling has been slower due to mixed weather and stronger demand from the power sector, while there is little sign that the global supply picture will change in the near-term, it said. UBS analysts expect EU storage to reach 78 per cent full by late October.
"However, if current injection rates persist, storage may only hit 71 per cent, well below the previous low of 77 per cent," they said in a note.
On Thursday, the CEO of German state-owned utility Uniper warned that the country's gas caverns are not being filled fast enough, calling for incentives to avoid a possible shortage in the next winter season.
Meanwhile, the Dutch Government said it had tasked state-owned energy company EBN to start filling gas reserves as gas companies were reluctant to do so because of high prices.
EU gas storage sites were last 39.13 per cent full, compared with around 47 per cent a year ago, Gas Infrastructure Europe data showed.
(Reporting by Nora Buli; editing by Nina Chestney)