European Gas Climbs as Mideast Tensions Stoke Supply Concerns

(Bloomberg) -- European natural gas prices extended a rally as mounting geopolitical risks in the Middle East fed fuel-supply concerns.

Benchmark futures for September delivery advanced as much as 2.6% Wednesday, before paring gains. Gas has risen for four days straight as traders fret about their ability to build stockpiles for winter.

Hamas said Israel killed its political leader in an airstrike on Tehran, prompting Iran to respond that it would “seek vengeance.” The escalation puts the energy-rich region even further on edge at a time of intensifying global competition for liquefied natural gas. 

LNG flows to Europe have been about 30% lower than average in July, ship-tracking data show. Meanwhile, outages at Norwegian fields have further tightened the market. While the continent’s storage facilities are well-stocked for the time of year, hot weather is pushing up demand for air-conditioning.

Dutch gas futures for September rose  to € a megawatt-hour on the Title Transfer Facility hub at 4:41 p.m. in Amsterdam.

“Further escalations in the Middle East show how quickly the TTF can jump in a day,” said Florence Schmit, an energy strategist at Rabobank.

Chevron Corp. said its facilities in Israel are fully operational and continue to supply gas to local and regional customers from both the Leviathan and Tamar reservoirs.

©2024 Bloomberg L.P.