European natural gas futures experienced a nearly 3% increase, reaching €37.5 per megawatt-hour on Friday, marking the highest level since early April. This rise is part of a broader surge in energy markets, fueled by escalating tensions in the Middle East. Recently, Israel launched a series of strikes on Iran, targeting its nuclear infrastructure and military assets, resulting in the deaths of two senior commanders. In response to these actions, Israel has threatened further military operations, while Iran has promised retaliation and has already dispatched drones to Israeli territory.
Beyond the geopolitical tensions, several other factors are contributing to the upward momentum in gas prices. The weekend is expected to bring a decline in wind power generation across northwestern Europe, which will decrease the availability of renewable energy sources. In France, there is growing concern over a potential reduction in nuclear output after the national regulator identified early signs of possible stress corrosion in a reactor. Additionally, unseasonably hot weather across much of Europe is increasing electricity demand, particularly for air conditioning, further impacting the gas market.
