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EMEA Natural Gas Update: Futures Edge Lower Amid Stalemate in US-Iran Talks

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European natural gas futures were up on Friday, amid the stalemate in peace talks between the US and Iran, keeping uncertainties elevated on Middle Eastern energy flows.

The Dutch TTF front-month contract was down 0.65% to 48.435 euros ($56.09) per megawatt-hour, while the UK NBP front-month contract was down 0.89% to 116.880 British pence ($1.57) per therm.

Both Dutch TTF and UK gas were up by 5.90% and 6.02%, respectively, during the week, according to data from Trading Economics.

On Wednesday, Iran's Foreign Minister, Seyyed Abbas Araghchi, said that "no tangible progress" had been made in ongoing negotiations with the US, even as communication channels between the two sides remained open, according to a report by Iran's Tasnim News Agency.

Meanwhile, Lebanon's Hezbollah rejected the latest US-based ceasefire proposal with Israel, seeking a complete and comprehensive cessation of hostilities instead, with no accompanying conditions, according to a report by Al Jazeera.

The strategically crucial Strait of Hormuz, which accounted for one-fifth of global LNG flows, remained shut for the 14th week running, with just 10 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.

Daniel Hynes, a senior commodity strategist at ANZ noted that concerns persisted regarding Europe's ability to secure enough fuel to replenish its storage facilities, especially with shipments to the region dropping "as demand from Asia picks up."

European gas inventories are at 41.25% of capacity, compared to 49.55% during the corresponding period a year ago, according to Gas Infrastructure Europe.

Inventories were significantly below the five-year average for this period, at 55.4%, according to the Swiss Federal Office of Energy.

All of this comes during a record-breaking heatwave across Europe, with temperatures across the continent rising twice as fast as the global average, according to Severe-Weather EU, which is bound to create increased demand for air conditioning, and thus, gas-fueled power burn.

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