EMEA Natural Gas Update: Futures Edge Lower With Steady Strait of Hormuz Traffic

European natural gas futures were down on Monday but hovered close to their three-week high, as flows through the Strait of Hormuz remained elevated. Front-month Dutch TTF contracts were down 1.25% to 44.535 euros ($50.85) per megawatt hour, while UK NBP futures fell 1.86% to 105.650 British pence ($1.41) per therm. This comes as the strategically crucial waterway, which accounted for one-fifth of global LNG flows, saw steady volumes, with 25 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor. That is well below the typical daily average of 138. Concerns mounted over the sluggish pace of inventory refilling across Europe, which stood at 50.03% of capacity, compared to 59.98% during the corresponding period a year ago, according to Gas Infrastructure Europe. Inventories were also significantly below the five-year average for this period, at 65%, according to the Swiss Federal Office of Energy. To make matters worse, the unprecedented heatwave across Europe is leading to a massive surge in space cooling demand across the continent, resulting in increased gas usage for power generation. The strengthening El Nino effect is being termed a key.