European natural gas futures edged lower on Thursday after reaching their highest level in over three years this week, as US President Donald Trump hinted at a potential de-escalation in the conflict with Iran.
Front-month Dutch TTF futures dropped 2.61% to 71.715 euros ($83.22) per megawatt hour, while UK NBP futures declined 2.45% to 177.680 British pence ($2.40) per therm.
On Wednesday, Trump said that the renewed US campaign against Tehran wasn't going to last "too long," since Iran's infrastructure had been decimated, while speaking to reporters from the Oval Office.
Trump also noted that the US was in complete control of the Strait of Hormuz, and was "bringing lots of boats out every day with millions of barrels of oil," helping alleviate supply constraints for global energy markets, including European LNG storage.
Traffic along the strategically crucial Strait of Hormuz, which accounted for one-fifth of global LNG flows, remained steady with 14 transits on Wednesday, according to ShipFinder.
Daniel Hynes, a senior commodity strategist at ANZ, noted that European markets continued to face difficulties "in attracting LNG to help refill storage facilities." Hynes noted that Britain was in a particularly precarious position, prompting concerns that the country could pay a premium to secure supplies in winter.
European gas inventories stood at just 65.10% of capacity, compared to 82.59% during the corresponding period a year ago, according to Gas Infrastructure Europe.
Inventories were also significantly below the five-year average for this period, at 82.7% according to the Swiss Federal Office of Energy.