European natural gas prices have risen for a sixth consecutive day, driven by escalating US-Iran conflict and heightened market fears of more severe disruptions to Middle Eastern energy supplies.
The benchmark futures price briefly surged by 5.7% to over €60 per megawatt-hour, marking the first time it has reached this level in four months.
Iran launched aggressive strikes against neighboring countries around the Persian Gulf in retaliation for recent US airstrikes, stating that a ceasefire agreement has effectively collapsed. The Strait of Hormuz, a critical waterway for transporting approximately one-fifth of the world's liquefied natural gas (LNG), has seen its LNG shipments largely halted due to the escalating hostilities.
According to the 14-day Relative Strength Index (RSI), prices have surged into overbought territory, signaling a potential reversal in market momentum. However, with Europe facing the daunting task of replenishing gas storage ahead of winter and being forced to compete with Asia and other regions for limited LNG supplies, the price rally continued at the start of the week.
Following intensified attacks over the weekend, visible vessel traffic through the Strait of Hormuz nearly ground to a halt early Monday. The recent vessel attacks have renewed concerns over the safety of ships transiting this crucial waterway.
An analyst from Bloomberg Intelligence noted in a report that natural gas prices are expected to remain firm, influenced by tight supply and "low storage levels in Europe and other regions."
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