European and British wholesale natural gas prices held near multi-year highs on Thursday as an escalating military conflict in the Persian Gulf threatened supply ahead of winter. The Dutch benchmark traded near its highest level since 2023, while European storage lags the five-year average as the European Central Bank prepares a rate decision.
European and British wholesale natural gas prices held near multi-year high watermarks on Thursday, consolidating sharp gains from the previous session as an escalating military conflict in the Persian Gulf kept global energy supply security on edge ahead of winter.
Dutch and British benchmarks near multi-year highs
The benchmark Dutch front-month contract rose 0.5% to trade at 79.64 euros per megawatt-hour, lingering close to its highest level since 2023 touched on Wednesday.
In Great Britain, the equivalent NBP wholesale gas contract gained 0.6% to trade at 198.00 pence per therm, holding within striking distance of its highest point since late 2022 and approaching the psychologically significant 200p threshold.
Persian Gulf escalation threatens supply
Tensions flared further after Iranian-backed Houthis in Yemen launched coordinated strikes on several Saudi Arabian cities, drawing a key regional U.S. partner deeper into the conflict. The escalation followed direct U.S. strikes on multiple Iranian oil tankers, which prompted a retaliatory Iranian missile attack on a U.S. military base in Jordan.
The military friction directly threatens maritime transit through the Strait of Hormuz, a critical bottleneck that handles roughly 20% of global liquefied natural gas traffic — chiefly originating from Qatar. With crude oil holding firm above $100 a barrel, the threat of shipping restrictions or sustained naval blockades in the Persian Gulf has forced European utilities to compete aggressively against Asian buyers for uncommitted Atlantic basin LNG cargoes.
Storage lags the seasonal average
The geopolitical shock comes at a vulnerable juncture for European energy infrastructure, as the continent enters the home stretch of the summer storage injection season with depleted reserves. Data from Gas Infrastructure Europe shows underground storage facilities filled to approximately 62% of capacity, trailing the five-year seasonal average by roughly 17 percentage points.
ECB rate decision looms
Surging energy input costs form the backdrop for the European Central Bank's monetary policy announcement later on the day. Money markets have almost fully priced in a 25-basis-point interest rate increase from President Christine Lagarde and the Governing Council, taking the benchmark deposit facility rate up to 2.50% as policymakers seek to prevent energy-driven price pressures from entrenching second-round effects across the single-currency bloc.
Source: Investing.com
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