Dutch and British natural gas prices rose on Thursday morning after fresh strikes in the Iran conflict and US President Donald Trump denied reports of a deal to reopen the Strait of Hormuz, while concerns over storage refilling persisted.
The benchmark Dutch front-month contract at the TTF hub was up €1.29 at €47.70 per megawatt hour (MWh) at 07:45 GMT, data from the Intercontinental Exchange (ICE) showed.
The British front-month contract was up 3.09p at 116.13p per therm.
"Today, we expect prices to react bullishly to Iranian retaliatory attacks on a US military base, signalling renewed escalation and a potential collapse of the ceasefire between the sides," LSEG analyst Dzmitry Dauhalevich said.
Iran and the US traded airstrikes hours after Trump denied a report he was close to a compromise deal to restore commercial shipping through the Strait of Hormuz, which had sent gas and oil prices lower on Wednesday.
The strait has been largely shut since hostilities began at the end of February, cutting around 20 per cent of global liquefied natural gas supply and leaving volumes stranded in the Persian Gulf.
The disruption has already prompted producers and consumers to diversify trade routes and energy sources, International Energy Agency Executive Director Fatih Birol said on Thursday.
Meanwhile, fears of competition with Asia as Europe refills depleted gas storage ahead of winter continue to support prices, ANZ senior commodity strategist Daniel Hynes said in a note.
"There is considerable focus on the possibility of a strong El Niño this year, which could boost air conditioning demand in Asia and thereby increase LNG demand," said Arne Lohmann Rasmussen, chief analyst at Global Risk Management.
EU gas storage sites were last 38.8 per cent full, compared with 46.6 per cent at the same time last year, Gas Infrastructure Europe data showed.
(Reporting by Nora Buli. Editing by Mark Potter)
