FX.co ★ UK Gas Prices Rise Sharply

UK natural gas prices climbed more than 3% on Tuesday to above 108 pence per therm, rebounding from the previous session’s losses after reports that an LNG carrier was attacked while leaving the Strait of Hormuz. According to Iranian state television, the vessel came under fire after allegedly ignoring warnings, although the broadcaster stopped short of explicitly claiming responsibility.

Prices were further supported by weather forecasts pointing to another period of extreme heat in Northwest Europe, which is expected to sharply increase air-conditioning use and electricity demand. This anticipated rise in consumption comes at a time when regional gas inventories are relatively low: storage sites are about 49% full, compared with nearly 60% at the same point last year. The shortfall has intensified concerns about Europe’s ability to rebuild adequate reserves before the winter heating season.