Dutch and British wholesale gas prices extended the previous session's gains on Thursday morning as the market expects shipping constraints via the Strait of Hormuz to persist, curbing liquefied natural gas (LNG) supply.
The benchmark Dutch front-month contract at the TTF hub briefly traded at €48.96 per megawatt hour in early trade, its highest since April 13. It was €0.24 higher at €47.10/MWh by 07:48 GMT, data from the Intercontinental Exchange (ICE) showed.
The British contract for June was up 0.42p at 116.16p per therm, after earlier trading at 120p/therm.
Prices had already risen nearly 10 per cent on Wednesday, tracking oil prices. US President Donald Trump is reportedly preparing further military action against Iran and has also discussed how to mitigate the impact of a possible months-long US blockade of Iran's ports with oil companies.
"The (price) move was driven by escalating tensions between the US and Iran with public threats exchanged between the two sides raising concerns over potential disruptions to supply through the Strait of Hormuz," LSEG analyst Dzmitry Dauhalevich said.
Brent crude oil prices have more than doubled since the start of the year, touching their highest since March 2022 on Thursday.
"While the oil market is increasingly accepting the reality of ongoing supply disruptions, the gas market has been more measured," analysts at ING Research said.
European gas prices have moved higher too in recent days, but they do not appear to fully reflect the scale of the LNG disruptions, they added.
Still, while seasonally weaker demand and a fair amount of demand destruction in the LNG market will help to take some pressure off prices, Europe will find it tougher to refill storage the longer the crisis persists, ING's analysts said.
EU gas storage sites were last 32.2 per cent full, Gas Infrastructure Europe data showed. The EU targets levels of 85-90 per cent full ahead of next winter. Meanwhile, summer maintenance is continuing to curb Norwegian pipeline gas supply to Europe.
(Reporting by Nora Buli; editing by Nina Chestney)
