Natural gas prices surge on the TTF exchange amid supply concerns via the Strait of Hormuz

Gas prices at the fundamental level 

European natural gas prices saw a notable increase in recent trading, rising by 3%, amid escalating geopolitical concerns about liquefied natural gas (LNG) supplies.

US-Iran tensions support prices 

This rise comes amid growing concerns that escalating tensions between the United States and Iran could disrupt LNG flows through vital waterways in the Middle East, most notably the Strait of Hormuz.

Approximately 20% of global LNG trade passes through this strait, including exports from Qatar, the world's second-largest LNG exporter, making any potential disruption a direct threat to global markets.

Reports also indicate that any US military action against Iran could occur more quickly than anticipated, given Israel's efforts to effect geopolitical changes in the region, further increasing uncertainty about supply stability.

Factors Limiting Natural Gas Gains

Despite escalating geopolitical risks, several factors have limited gas gains, most notably:

- Warmer weather in Europe, reducing heating demand.

- Continued stable flows despite power outages in Norway.

- Increased reliance on renewable energy sources in Germany, easing pressure on gas demand.

These factors have helped to partially alleviate concerns, but they haven't prevented the continuation of the upward trend, given the market's sensitivity to any sudden political developments.

Technical Analysis of Natural Gas

Technically, natural gas prices on the weekly timeframe are approaching key support levels around $3.15, coinciding with a test of the ascending trendline.

As mentioned in our weekly analysis video here

Expected Scenario:

The outlook still points to a potential rebound from this area, targeting $4.00 as the first objective, followed by $4.60 as the second objective if the positive momentum continues.

Alternative scenario: 

This bullish scenario fails if the $2.60 level is broken downwards, which could open the way for a deeper correction wave.