Dutch and British gas prices rose on Tuesday morning on reports of renewed tensions in the Middle East and a low wind power forecast that boosted demand for gas-powered electricity.
The benchmark Dutch front-month contract at the TTF hub (TFMBMc1) was up €1.884 at €46.015 per megawatt hour (MWh) or around $15.41/mmBtu, by 0815 GMT, ICE data showed.
The contract touched €46.77/MWh in earlier trade, its highest level since June 12.
The British June contract (NGLNMc1) was up 4.45 pence at 109.06 pence per therm.
Iran's Revolutionary Guards fired at least two missiles at commercial ships transiting through the Strait of Hormuz on Monday night, Axios reported, citing two U.S. officials.
“This is a significant market-moving event, and the prices are expected to react bullishly to these developments, as they may signal a potential re-escalation of the conflict,” LSEG analyst Dzmitry Dauhalevich said in a daily research note.
The conflict has impacted shipping through the Strait of Hormuz, through which roughly a fifth of the world's LNG typically passes.
Forecasts for higher temperatures across much of Europe also lifted demand expectations.
“The market remains concerned as another heatwave is heading for Europe, with temperatures – and thereby gas consumption -set to rise over the coming days,” analysts at Mind Energy said.
In Northwest Europe, non-local distribution zone demand, which includes power plant demand, is forecast to rise sharply by 204 gigawatt hours/day for the day-ahead due to lower wind speeds, LSEG data showed.
In Britain, peak wind power output was forecast at 12.5 GW on Tuesday, dropping to 4.4 GW on Wednesday, Elexon data showed.
In the European carbon market, the benchmark contract ICEENDEX:ECF1! fell €0.78 to €81.01 a metric ton.