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EMEA Natural Gas Update: Futures Mixed Amid Uncertainties Surrounding US-Iran Peace Deal

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European natural gas futures were mixed on Tuesday, as markets awaited more details on the US-Iran peace agreement.

The Dutch TTF front-month contract dropped 0.12% to 42.455 euros ($49.25) per megawatt-hour, while the UK NBP front-month contract was up 0.06% to 101.070 British pence ($1.36) per therm.

Even as markets await additional details regarding the peace deal between the two countries, an interim accord is set to be signed in Switzerland on Friday, according to Pakistan's Prime Minister Shehbaz Sharif, in a post on X.

At the same time, Qatar, the world's largest LNG supplier, has announced that it plans to restore half of its output within a month of the strait reopening, and 80% within two months, according to a Bloomberg report, citing officials familiar with the matter.

Meanwhile, the Strait of Hormuz remained shut for the 16th week running, with just two vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.

Daniel Hynes, a senior commodity strategist at ANZ, has warned that "the resumption of traffic through Hormuz" will be challenging, while noting that concerns persist among shipping executives amid a lack of clarity on the deal.

Geopolitical strategist Cyril Widdershoven, a Senior Advisor at Blue Water Strategy, echoed similar concerns toon Monday, saying that while this agreement improves the outlook from a few weeks ago, it should not be "confused with normalization."

Widdershoven highlighted persistent concerns regarding "mines, unexploded ordnance, vessel tracking security, electronic interference, and broader regional risks," which he said will continue to influence operating decisions.

Jorge Leon, Head of Geopolitical Analysis at Rystad Energy, noted that this was an important de-escalation, "but it is not a resolution," he said, adding that the markets should stop pricing it as one.

"What they produced is an agreement that serves those immediate interests while leaving the hardest questions," he said, highlighting Washington's need to bring gasoline prices down heading into the midterms, and Iran's much-needed sanctions relief.

This leaves many issues unresolved, including the fate of Iran's nuclear program and the long-term status of the Strait of Hormuz, according to Leon.

European natural gas inventories are at 44.72% of capacity, compared to 53.40% a year ago, according to Gas Infrastructure Europe.

Inventories are below the five-year average for this period, at 59.00%, according to the Swiss Federal Office of Energy.

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