FX.co ★ US Natural Gas Prices Climb

US natural gas futures rose nearly 2% to around $3 per MMBtu on Tuesday, extending Monday’s 3.5% advance, as escalating conflict in the Middle East disrupted supply. On Monday, Iran announced the closure of the Strait of Hormuz and threatened to “burn any ship” attempting to pass through the strategic waterway. The Strait is a key chokepoint for global energy trade, handling roughly 20% of LNG exports, largely from Qatar. Any prolonged disruption there could lift demand for US LNG, especially with the US domestic natural gas market currently running a 0.3% deficit relative to its five-year average. Adding to supply concerns, QatarEnergy—one of the world’s largest LNG producers—suspended operations after Iranian drone strikes targeted its Ras Laffan and Mesaieed facilities.