FINWIRES · TerminalLIVE
FINWIRES

EMEA Natural Gas Update: Futures Prices Down on Hormuz Talks

By

European natural gas futures pared earlier losses in after-hours trading on Wednesday but still traded lower as markets tracked developments around the Strait of Hormuz and assessed broader supply and storage risks.

The front-month Dutch TTF contract declined by 2.669% to 46.205 euros ($53.74) per megawatt hour, while the UK NBP front-month contract fell 1.925% to 113.10 British pence ($1.52) per therm.

Shipping data and media reports indicated another LNG tanker from Abu Dhabi has transited the Strait of Hormuz en route to India, signaling improved energy flows through the strategic waterway despite ongoing geopolitical tensions. The vessel reportedly loaded cargo at Abu Dhabi National Oil Co.'s Das Island export facility without broadcasting its position. Satellite tracking has shown continued tanker activity at Das Island even as vessels intermittently go dark near the terminal, news outlets reported.

Data from Gas Infrastructure Europe showed EU gas inventories at 38.52% of capacity as of Wednesday, compared with 46.60% a year earlier.

Analysts at Timera Energy noted that the forward futures prices curve still offers limited incentive for traders to inject gas into storage, with pricing implying expectations of easing geopolitical risk later in 2026. That structure is discouraging restocking activity, while government intervention is seen as unlikely after losses incurred during intervention programs in the 2022 energy crisis. Persistent low storage levels could leave Europe exposed to elevated prices next winter if refill rates do not improve.

Weather conditions are adding further pressure on the effort to boost inventory levels.

French meteorological group Keraunos said in a social media post that several hundred monthly heat records were broken across Europe on Tuesday, while forecasters warned of an increasing likelihood of hot, dry conditions returning in June.

Atmospheric G2 said in a social media post that extended higher temperatures could boost electricity demand for cooling, reduce wind generation, and strain hydro output and river systems, potentially increasing reliance on gas-fired power.

In industry news, the German state-owned importer SEFE announced an agreement to purchase 1 million tonnes of LNG per year from Canada's Ksi Lisims LNG project for 20 years. Deliveries are expected to begin in 2030. The deal adds to SEFE's existing long-term supply portfolio, which includes contracts with Venture Global, Argentina's Southern Energy SA, and Turkey's BOTAS, as European buyers continue to lock in future LNG volumes amid ongoing market volatility.

Related Articles

Commodities

Refiners Slide as US-Iran Peace Hopes Pressure Crack Spreads, TPH Energy Says

Refining equities and product crack spreads declined last week as reports of progress in US-Iran peace negotiations pressured margins and softened sector sentiment, TPH Energy strategists said in a note on Tuesday.Matthew Blair, analyst at TPH Energy, said the refining group fell 1.3%, underperforming the S&P 500's 0.9% gain, with high-beta names leading losses.PBF Energy (PBF) dropped 4.9%, while Phillips 66 (PSX) outperformed the group with a 1.6% rise, making it the lone notable gainer among diversified refiners.TPH said the decline was driven by a sharp compression in refined product cracks. US gasoline cracks fell $12 to $25 per barrel, while US diesel cracks declined $7 to $45/bbl.Regional softness was most pronounced in the Midwest, Midcontinent and Rockies, TPH analysts said, reflecting broad-based margin pressure.International cracks were mixed. Northwest Europe gasoline and diesel eased by $1 and $3/bbl, respectively, while Singapore markets moved against the trend, with gasoline up $3/bbl and diesel rising $5/bbl.Forward curves also reflected the softer tone. The 2026 gasoline strip moved $1 lower, while diesel was unchanged.On the crude side, the Brent-WTI spread narrowed to $3/bbl from $5 previously, reducing a key advantage for US refiners that benefit from discounted domestic crude.Blair said grades, including Mars, Louisiana Light Sweet and Bakken crude strengthened, while Western Canadian Select at Hardisty, Mexico's Maya crude and Alaska North Slope held largely steady.Macro and industry developments added to the mixed backdrop. US regular gasoline prices eased 5 cents to $4.45 per gallon. India raised retail gasoline prices in response to war-related supply dynamics involving Iran.Kuwait's refinery throughput has reportedly fallen by half since the Middle East conflict began, while US jet fuel production has climbed above 2 million barrels per day in recent weeks.On corporate activity, Delek US Holdings (DK) disclosed a $100 million share repurchase authorization from REH. However, despite the recent pullback in refining equities, TPH said most refiners continue to trade above their three-year average forward EBITDA valuation multiples, except for Phillips 66 and Valero Energy (VLO).

$DK$PBF$PSX$VLO
Commodities

US Natural Gas Update: Futures Prices Soften in Choppy Trade

US natural gas futures extended losses in after-hours trade on Tuesday, though price action in the expiring June contract remained volatile as focus shifted toward July and the next phase of weather-driven demand.The front-month Henry Hub contract slipped 0.58% to $2.89 per million British thermal units, while the continuous contract fell 0.40% to $3.009/MMBtu.The June contract, which expires Wednesday, traded as low as $2.878/MMBtu, below Friday's settlement of $2.907, and reached an intraday high of $2.989/MMBtu.Weather models turned cooler over the weekend, weighing on sentiment. The overall Lower 48 forecast cooled by 6.7 degrees Fahrenheit, according to Aegis Hedging. The firm noted, however, that the cooler revisions were concentrated in the one- to two-week outlook, while temperatures at or above seasonal norms are still expected through mid-June."The setup is still defined by a familiar late spring tension, where mild stretches keep balances comfortable, but any meaningful heat building across the South and East can quickly lift power burn and improve sentiment at the front of the curve," Gelber & Associates said in a Tuesday note.Lower-48 gas demand was estimated at 66.6 billion cubic feet per day on Tuesday, down 2.5 Bcf/d from Friday but 6.8% higher than a year earlier, according to BNEF.Aegis Hedging said strengthening power-sector demand continued to underpin the market. Power demand rebounded by nearly 6 Bcf/d over the weekend to 36.1 Bcf/d, the firm said. Celsius Energy estimated Monday power burn at 30.8 Bcf, up 0.3 Bcf day-on-day and 2.9 Bcf above year-ago levels.The seven-day average for May 19-25 stood at 32.3 Bcf/d, up 3.6 Bcf/d from the same period last year.On the supply side, Lower-48 dry gas production rose to 110.6 Bcf/d on Tuesday, up 500 million cubic feet per day from Friday and 3.1% above year-earlier levels, according to BNEF.Barchart said some short covering emerged in natural gas futures after stronger LNG export demand pointed to tighter domestic balances. Gas flows to US LNG export terminals rose to 18.4 Bcf/d on Tuesday, up 8.8% week-over-week, according to BNEF data.

Commodities

Gujarat Gas Q1 2026 Volumes Fall Amid Weaker Industrial Demand; CNG Sales Hit Record High

Gujarat Gas reported Q1 2026 earnings on Tuesday, with total volumes of 8.88 million metric standard cubic meters per day in Q1 2026, down from 10.98 mmscmd reported in the same period last year.Total Piped Natural Gas volumes stood at 5.55 mmscmd.Industrial PNG volumes were also down to 4.71 mmscmd from 7.25 mmscmd in Q1 2025.Domestic PNG volumes edged up to 0.69 mmscmd, compared with 0.62 mmscmd recorded a year ago.Commercial PNG volumes largely held steady, inching up to 0.14 mmscmd from 0.13 mmscmd a year ago.Compressed Natural Gas volumes rose in the quarter to 3.33 mmscmd from 2.98 mmscmd in the same period a year earlier.Gujarat Gas reported the highest-ever CNG volumes of 3.33 mmscmd in Q1 2026, marking a 12% increase compared with Q1 2025 on the back of investments in CNG station infrastructure.