FX.co ★ UK Natural Gas Hovers at 4-Month High

UK natural gas prices rose back above 150 pence per therm on Friday, reaching a four-month high amid mounting concerns over Europe’s LNG supply security as fighting between the US and Iran escalates. The US has carried out airstrikes on Iran for 13 consecutive nights, with President Donald Trump warning Tehran and its Houthi allies in Yemen of “major military punishment” if they launch further attacks on vessels in the Red Sea.

UK gas prices are up more than 9% so far this week and have surged over 44% in July. Reduced LNG flows from the Persian Gulf have intensified competition with Asian buyers, while hotter-than-normal weather across Europe has driven up electricity demand for cooling. Together, these factors are making it more difficult for Europe to rebuild gas inventories ahead of the winter heating season.

Equinor, Europe’s largest gas supplier, has warned that the bloc is unlikely to achieve its 80% storage target before the start of the heating season, leaving the market more exposed to sharp price swings once colder weather sets in.