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EMEA Natural Gas Update: Futures Fall as LNG Flows Improve, Middle East Tensions Ease

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European natural gas futures fell on Friday, reversing earlier gains as signs of improving LNG flows eased supply concerns, while diplomatic progress in the Middle East further tempered risk sentiment.

Front-month Dutch TTF futures dropped 1.18% to 67.465 euros ($78.56) per megawatt-hour, while UK NBP futures declined 1.35% to 166.220 British pence ($2.26) per therm. Both Dutch TTF and UK Gas were up 2.10% and 1.84%, respectively during the week, according to TradingEconomics.

On Friday, the German government said gas operators were refilling storage facilities at a brisk pace, helped by more favorable price dynamics and subdued competition from Asian buyers, according to Reuters.

The accelerated injections come as Germany seeks to rebuild inventories ahead of winter, with storage levels still at a seasonal low of 51.64%.

On Thursday, Mohsen Rezaei, the Secretary of Iran's Supreme National Security Council, said that the country was preparing a list of conditions to reopen the Strait of Hormuz, after agreeing with Oman on a shipping corridor through the waterway, according to a Reuters report, citing an Al Manar TV interview.

According to Qatar's Foreign Ministry, the country had discussed a "joint project" with Tehran to clear mines from the Strait of Hormuz to improve the safety of navigation along the crucial strait, according to an Al Jazeera report.

Daniel Hynes, a senior commodity strategist at ANZ, echoed similar concerns, noting that "it was unclear that the US would accept any deal that excludes it from control over the strait."

Traffic through the Strait of Hormuz surged to 29 on Thursday, according to data from ShipFinder.

Meanwhile, European natural gas inventories languished at seasonal lows, at 63.8% of capacity, compared to 76.46% 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 81.0%, according to the Swiss Federal Office of Energy.

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