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EMEA Natural Gas Update: Futures Edge Higher Amid Stalled US-Iran Talks, Threats Against Oman

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European natural gas futures surged on Friday as US-Iran negotiations remained deadlocked and Washington threatened Oman over a potential deal with Tehran to reopen the Strait of Hormuz.

Front-month Dutch TTF futures rose 0.61% to 61.800 euros ($72.18) per megawatt-hour, while UK NBP futures gained 1.50% to 153.500 British pence ($2.08) per therm.

The 60-day ceasefire between the US and Iran is set to end on Monday, with no end to the ongoing conflict in sight, despite reports early last week that the two sides had consented to extend the deadline with mediators, as reported by.

On Monday, speaking with Fox News, US President Donald Trump threatened to bomb Oman if it "gets in the way," targeting the ongoing negotiations between Muscat and Tehran over the control of commercial shipping along the Strait of Hormuz.

Meanwhile, traffic along the strategically crucial Strait, which accounted for one-fifth of global liquefied natural gas flows, has dropped to a trickle, with just eight vessels transiting on Sunday, according to data from ShipFinder.

Daniel Hynes, a senior commodity strategist at ANZ, noted that the return of LNG tankers transiting the waterway remained "elusive," with the US unwilling to relent on keeping it free from Iranian control.

European gas inventories stood below historic averages at 60.78%, compared to 73.31% 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 77.8%, according to the Swiss Federal Office of Energy.

However, weather forecasts are offering much-needed respite to the region, with a milder-than-normal and relatively wet winter expected this year, owing to the powerful El Nino pattern, which is expected to draw warmer and moisture-rich oceanic air across much of the continent, according to Severe-Weather EU.

This should help reduce demand for heating gas during the winter, easing pressure on the region's significantly below-average gas inventory levels.

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