Dutch TTF gas, the European benchmark, closed July at €59.44 per MWh, up 38% over the month and 75% above the same date a year ago. Brent ended the month at $87.93 and West Texas Intermediate at $84.67, each up about 23% in July. Heating oil rose 27% in the month and is 78% higher than a year ago. Naphtha, the feedstock for European petrochemicals and fertilizer, is up 27% over July and 39% over a year ago.
The proximate cause is Hormuz. QatarEnergy has extended its force majeure on deliveries to European and Asian buyers until at least the end of September, after one of its tankers was attacked in the strait. When the first Qatari cargo in more than three weeks cleared the waterway on July 30, European prices fell about 4% on that single ship, showing how thin supplies are. Europe and Asia are now bidding against each other for what LNG remains.
European gas storage stands at roughly 55% full, below the five-year seasonal average and behind the pace needed to meet pre-winter targets before the heating season starts. Summer is when storage is normally filled, since demand and prices are lower. This year the refill is competing with heatwave electricity demand and is being done at war prices. Whatever Europe fails to put underground by November it must buy on the spot market in January, when it will have no leverage at all.
