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EMEA Natural Gas Update: Futures Edge Lower as Global Supply Constraints Ease Gradually

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European natural gas futures edged lower on Thursday, amid the recovery in flows via the strategically crucial Strait of Hormuz.

Front-month Dutch TTF contracts were down 0.20% to 40.795 euros ($46.38) per megawatt hour, while UK NBP futures dropped 0.26% to 96.930 British pence ($1.28) per therm.

This comes as supply constraints begin to ease, with 12 vessels transiting through the Strait of Hormuz over the past 24 hours, according to the Hormuz Strait Monitor.

At the same time, seven empty Qatar-linked LNG tankers have entered the strategically crucial Strait in recent weeks, signalling a recovery in supplies, according to a Reuters report, citing ship-tracking data.

QatarEnergy has also said that it expects a rapid recovery in LNG output once the Strait is safe and navigable, with plans to hit 50% of capacity within a month, and 80% within two months, according to a Bloomberg report, citing people familiar with the matter.

While this is expected to ease supply constraints in the near-term, Daniel Hynes, a senior commodity strategist at ANZ, has noted that the two production lines in Qatar, which were damaged by airstrikes in recent months, "will remain offline for the foreseeable future."

On the other hand, Europe is experiencing a "monstrous Heat Dome," leading to record-high temperatures across several regions, with France and the UK seeing temperatures north of 40 degrees Celsius, according to Severe-Weather EU. This is expected to result in increased air conditioner usage and thus, higher gas-fired power demand.

European gas inventories remained depleted at just 47.20% of capacity, down from 56.23% 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 61.4%, according to the Swiss Federal Office of Energy.

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Trump Says Iran Talks Progressing, Calls Hormuz Fees Unacceptable

US President Donald Trump said Wednesday negotiations with Iran are advancing and warned that any fees on vessels transiting the Strait of Hormuz would be "unacceptable."Trump made the remarks speaking alongside Nato Secretary General Mark Rutte at the White House."We're doing great in our negotiations with Iran," Trump said, expressing confidence in ongoing talks with Tehran and dismissing suggestions that recent political developments could affect the discussions.Asked whether he would support an agreement that imposed fees on vessels using the Strait of Hormuz, Trump said, "It would be unacceptable," arguing that similar charges could encourage other countries to follow suit.Discussing the Iran conflict, Trump said the US did not receive the level of support it expected from allies, adding that while the US did not need help, it would have been "nice" if partners had offered assistance.Trump also credited Turkish President Recep Tayyip Erdogan and Chinese President Xi Jinping for staying out of the Iran conflict. He said both leaders honored his requests to avoid involvement, helping prevent a broader regional escalation.Trump said he has directed the Department of Justice to examine fuel pricing practices at major energy companies alleging price gouging by oil firms. He noted that retail gasoline prices have not fallen in line with declines in crude oil markets.He pointed to several energy majors including Exxon Mobil (XOM), Chevron (CVX), Shell (SHEL), BP (BP), among others. "... the gasoline or the oil prices have come down so much, and we are not seeing anything at the pump by comparison," Trump said.Trump said, "...we should be, in my opinion, at $2.25 right now at the pump, and we're higher than that, and we are doing a big investigation on it."He alleged that the companies are "possibly gouging," and warned, "I hope they're not. Otherwise, they're going to be in big trouble."The US President said about 19 million barrels of oil moved through global markets the previous day, describing the volume as "a flood" and citing it as evidence of strong supply conditions.Turning to UK energy policy, Trump urged British leaders to expand North Sea oil development and argued the country is failing to capitalize on a major resource opportunity. "You have the greatest oil field in the world, one of them, it's called the North Sea oil," Trump said.

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Oil & Energy

US Oil Update: Crude Plunges as More Oil Tankers Exit Strait of Hormuz

Crude oil futures plunged in after-hours trading on Wednesday, extending their decline to pre-war levels, as a resumption of tanker traffic through the Strait of Hormuz and progress in US-Iran peace talks eased fears of a prolonged supply disruption in the Middle East.Front-month West Texas Intermediate crude futures tumbled 4.3% to $70.05 per barrel, while Brent futures were down 4.9% to $73.32/bbl.Saxo Bank analysts said Brent crude slipped below $77/bbl, leaving prices less than 10% above pre-war levels, as tanker traffic through the Strait continues to normalize.US commercial crude oil inventories decreased by 6.1 million barrels to 412.1 mmbbls in the week ended June 19, the Energy Information Administration said in its weekly report on Wednesday.Crude inventories are now about 7% below the five-year average for this time of year, the EIA said.Fuel inventories rose, with gasoline stocks rising by 2.1 million barrels last week, while distillate increased by 3.1 million barrels, the agency said.Gelber & Associates said the selloff in crude markets comes despite a supportive US inventory print, with commercial crude stocks drawing 6.1 mmbbls last week, as product builds and demand concerns kept the bullish impact limited.Meanwhile, the latest data from Kpler show that at least 20 oil tankers carrying 35 million barrels of oil have been stranded in the Persian Gulf, with 15 of them exiting the Strait of Hormuz since the US and Iran agreed to open the strategic waterway.More commercial vessels are transiting the strategic waterway with their satellite signals switched on, with Kpler strategists saying the Strait appears operational under the US-Iran MoU, but dark-route activity and uncertainty beyond the 60-day window keep the recovery cautious.Oman said it would keep the Hormuz open to shipping without imposing tolls and had designated two temporary routes, north and south of the existing shipping lane, to facilitate the safe passage of vessels leaving the region.The International Maritime Organization also said on Tuesday it had received safety guarantees allowing hundreds of ships to exit the Persian Gulf.Oman said it would keep the Hormuz open to shipping without imposing tolls and had designated two temporary routes, north and south of the existing shipping lane, to facilitate the safe passage of vessels leaving the region.The International Maritime Organization also said on Tuesday it had received safety guarantees allowing hundreds of ships to exit the Persian Gulf.

Oil & Energy

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