European and British wholesale gas prices jumped on Tuesday as tanker attacks in the Persian Gulf and Red Sea outweighed a rise in LNG shipments through the Strait of Hormuz. UBS separately raised its price forecasts, while EU storage keeps building ahead of winter.
European and British wholesale natural gas prices snapped a brief early-week lull on Tuesday, trading sharply higher as ongoing tanker attacks across Middle Eastern maritime choke points overshadowed a broader recovery in seaborne fuel shipments. The Dutch front-month contract jumped 3% to trade at 75.74 euros per megawatt-hour, reversing the previous session's losses. In Great Britain, the equivalent wholesale gas contract climbed 3 pence to trade at 189.00 pence per therm.
Hormuz cargoes fail to offset tanker risk
The jump followed a quiet start to the week, during which energy desks had digested data showing a significant uptick in regional supply flows. Maritime tracking data showed the volume of LNG cargoes exiting the Strait of Hormuz rose in September to its highest monthly level since February, supported by the partial resumption of regional pipeline networks and loading terminals. Yet ongoing drone and missile strikes targeting commercial tankers and energy infrastructure across the Persian Gulf and Red Sea continue to keep shipping insurance rates elevated and transit routes unpredictable. As a result, traders remain hyper-sensitive to any disruption that could suddenly bottleneck seaborne LNG deliveries bound for Western European regasification terminals.
UBS hikes price targets
UBS raised its fourth-quarter 2026 Dutch TTF forecast to €75/MWh, up sharply from its previous €62/MWh projection. The bank also hiked its full-year 2027 forecast to €45/MWh from €40/MWh. UBS's base case assumes diplomatic negotiations will progress toward year-end to stabilize Red Sea and Persian Gulf shipping activity, but its analysts warned that seaborne gas supply will prove far slower to recover than crude oil flows following the recent regional military escalation.
The surge in wholesale energy costs also complicates the monetary outlook across major central bank trading desks. ECB Chief Economist Philip Lane noted on Tuesday that high energy costs have yet to generate strong second-round inflation pass-through, though the persistent cost floor under gas and oil curves threatens to keep headline consumer prices elevated.
EU storage reaches 72% ahead of peak winter demand
Underground gas inventories across the European Union have continued their steady pre-winter buildout, offering a partial structural buffer. Latest data from Gas Infrastructure Europe shows EU gas storage caverns are currently 72% full, up from 66% a month earlier. Still, storage levels remain below historical benchmarks, leaving regional gas prices highly sensitive to early cold snaps or geopolitical shipping delays.
Source: Investing.com
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