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EMEA Natural Gas Update: Futures Prices Decline Further on Potential Peace Deal

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European natural gas prices extended losses on Tuesday as markets tracked progress on a US-Iran interim deal that could reopen the Strait of Hormuz.

The Dutch TTF front-month contract fell 1.228% to 41.985 euros ($48.77) per megawatt-hour, while the UK NBP front-month contract dropped 0.891% to 100.11 British pence ($1.34) per therm.

A memorandum of understanding between the US and Iran is expected to be signed in Switzerland on June 19, although details have not yet been officially disclosed, and uncertainty remains about the pace of reopening the Strait of Hormuz and normalizing supplies.

Mind Energy said the TTF front-month contract has dropped about 15% over the past three sessions, but remains well above pre-conflict levels. "Uncertainty about the stability of the agreement is still high, and the market is not in any way ready to remove all the risk premium," the company said.

Meanwhile, Gas Infrastructure Europe data showed EU gas storage at 44.72% of capacity, compared with 53.40% a year earlier, and is well below the five-year average of 59%, according to the Swiss Federal Office of Energy.

Vortexa said unplanned French nuclear outages could lift summer LNG demand, while continent-wide LNG deliveries reached 2.1 million tonnes (35 cargoes), the highest in a month. France's Montoir terminal received its first cargo since early May after maintenance, lifting national imports to 0.4 million tonnes, about 30% above the four-week average. EDF's Saint-Alban plant could face cooling-related restrictions from June 17 due to high river temperatures.

Timera Energy warned Qatari LNG supply will not recover quickly, citing structural damage at Ras Laffan that removed 12.8 million tonnes per annum of capacity for 3-5 years. The firm added that reopening the Strait of Hormuz could take up to six months due to mine clearance and insurance constraints tied to a large backlog of vessels.

European spot LNG buyers still face competition from Asian buyers for cargoes. ANZ analyst Daniel Hynes said North Asia LNG spot prices fell 10% on the latest peace proposal, noting demand is rising, but inventories remain depleted, while hotter summer temperatures are increasing power-sector gas consumption.

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