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EMEA Natural Gas Update: Futures Pull Back from Five-Month Highs as Hormuz Hopes Temper Rally

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European natural gas futures extended their pullback in after-hours trading on Friday, having earlier reached fresh five-month highs near 70 euros per megawatt-hour, as traders took profits and weighed signs of possible diplomatic progress in the Middle East.

Front-month Dutch TTF futures fell 3.051% to 66.185 euros ($76.74) per MWh, while UK NBP futures declined 2.890% to 163.620 British pence ($2.22) per therm.

European natural gas benchmarks retreated from their highest levels since Mar. 19, pausing after a multi-session rally but remaining on track for a third consecutive weekly gain, Investing.com said Friday.

Gas contracts had touched five-month highs earlier in the session before reversing lower as traders took profits and priced in diplomatic developments that could help resolve the conflict in the Middle East and restore commercial traffic through the Strait of Hormuz.

Iranian security chief Mohsen Rezaei said Tehran is drafting conditions for reopening the Strait of Hormuz in response to requests from mediators, but added that the US must first take practical steps to meet those conditions, media outlets reported.

Qatar's prime minister held talks in Tehran on key issues including the strait, amid hopes that US-Iran negotiations to end the war could resume. However, a US government source said agreements between Iran and Oman do not concern Washington, reiterating that the Strait of Hormuz is open, mines have been cleared, no talks are scheduled, and the naval blockade remains in place, Al Jazeera reported Friday.

Meanwhile, European gas storage levels remain well below historical norms. Gas Infrastructure Europe said EU inventories were 62% full, compared with 76.5% a year earlier and well below the 81.0% five-year average recorded by the Swiss Federal Office of Energy.

Trading Economics said the bloc's current inventory level was the lowest for the season since 2009, highlighting continued pressure on the European gas market ahead of the next heating season.

Weather-related risks to Europe's energy infrastructure are also expected to persist into next month. Hot, dry weather in France could lead to further restrictions on nuclear power generation while keeping river flows and hydropower availability under pressure, weather forecasters said, according to Montel.

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Commodities

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