UK natgas holds advance as Gulf LNG disruptions persist

UK natural gas prices fell to 201 pence a therm on Friday but remained near their highest level since December 2022 as disruptions to LNG supplies from the Persian Gulf continued. Fighting between the US and Iran has intensified over the past two weeks, centering on control of the Strait of Hormuz, while the blockade has already disrupted around 20% of global LNG flows, mainly affecting shipments from Qatar. Europe has struggled to rebuild depleted inventories, with storage sites around 67% full, below historical norms.

The European Commission said there is no immediate risk to gas security this winter, but it warned that a sustained disruption to Gulf LNG supplies could tighten global supply further and force Europe to compete more aggressively with Asia and other buyers for alternative cargoes as heating demand starts to rise. Despite Friday's decline, UK gas prices are still over 12% higher this week, for a fifth straight weekly gain.