European natural gas futures edged higher on Thursday, snapping a two-day losing streak after Iran and Oman reached an agreement over control of the Strait of Hormuz.
Front-month Dutch TTF futures rose 0.05% to 65.660 euros ($76.50) per megawatt-hour, while UK NBP futures rose 0.12% to 162.450 British pence ($2.22) per therm.
On Wednesday, Iran's Deputy Foreign Minister, Kazem Gharibabadi, said that Tehran and Muscat had come to terms on a new temporary transit route along the Strait of Hormuz for commercial vessels to use, which would be seven miles wide, as reported by.
Hossein Mohebbi, a spokesperson for Iran's Revolutionary Guard Corps, said that the two countries had also reached an agreement over the sharing of control and revenues from the strait.
"Agreements have been reached on the share of each country in the waters of the strait and the share of Iran and Oman in its revenues," Mohebbi said.
While this helped ease market concerns, Iranian officials noted that the crucial waterway would continue to remain closed until Washington meets Tehran's demands, which include lifting the naval blockade, removing all sanctions against the country and unfreezing its assets held abroad.
Meanwhile, traffic along the strategically crucial strait, which accounted for one-fifth of global LNG flows, stood at 14 on Wednesday, according to data from ShipFinder.
Daniel Hynes, a senior commodity strategist at ANZ, highlighted the uncertain nature of the deal with Iran and Oman, noting that "it was unclear that the US would accept any deal that excludes it from control over the strait."
This comes at a time when European gas storage inventories languish at a seasonal low of 63.54% of capacity, compared to 76.24% 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 80.8%, according to the Swiss Federal Office of Energy.