FINWIRES · TerminalLIVE
FINWIRES

EMEA Natural Gas Update: Futures Rise After Trump Says US-Iran Ceasefire was Weak

By

European natural gas futures were up on Tuesday, after US President Donald Trump said that the ceasefire with Iran was on "massive life support."

The front-month Dutch TTF contract rose 2.15% to 47.22 euros ($55.47) per megawatt-hour, while the UK NBP front-month contract gained 2.79% to 116.59 British pence ($1.58) per therm.

This comes following Trump's decision to reject Iran's response to the US-backed ceasefire proposal, calling it "totally unacceptable" in a Truth Social post on Sunday.

On Monday, while addressing reporters from the Oval Office, Trump said that the current ceasefire between the US and Iran was at its "weakest," adding that it was on "massive life support," hinting at a potential escalation in hostilities in the region.

Meanwhile, the Strait of Hormuz, which handled one-fifth of global LNG flows, remained effectively closed for the 11th week running. While it did see an uptick in traffic, with 17 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor, it is still significantly below the typical daily traffic of 138.

These supply disruptions coincide with the European gas stockpiling season, with inventories significantly depleted, at just 35.4% of capacity, compared to the five-year average for this period at 47.8%, according to data from the Swiss Federal Office of Energy.

According to Daniel Hynes, a senior commodity strategist at ANZ, the situation was made worse by an unplanned outage at Norway's Hammerfest LNG plant, along with an unseasonably cool weather hitting large parts of Europe, which is increasing heating demand.

Related Articles

Oil & Energy

Market Chatter: Trump Proposes to Reduce or Suspend Federal Tax on Gasoline

US President Donald Trump has suggested he will either reduce or suspend the federal tax on gasoline to curb rising prices for the fuel amid the Iran war, according to comments to the press on Monday, a video of which was posted by The Hill on YouTube.When a reporter asked if he was going to suspend the tax, Trump answered "I'm going to reduce until the..." then switched to talking about his expectation that gasoline and oil prices will "drop like a rock" once the conflict ends.When asked for how long will he suspend the tax, he said, "Until it's appropriate. It's a, you know a small percentage, but it's still money."The incomplete phrasing suggests he intends to either reduce or suspend the tax, which would follow in the footsteps of many other countries that reduced or suspended the tax as a means of controlling price inflation in response to the energy shock.While his answer to the question was unclear, Trump talked at length about the fact that buyers are turning increasingly to the US for energy supplies.He said that the country is investing in logistics capacity to meet the new demand, which he expects to last beyond the duration of the conflict in the Middle East and he described the US as "a big filling station.""When it first came about 20% of the oil came out of Hormuz, that's a lot, but you know with time, they're going to Texas, they're going to Louisiana, they're going to Alaska ... Alaska, it seems like it's very far away from Asia but it's actually a relatively short trip by comparison to other locations they have to go to to get oil and they're going to Alaska," Trump said."Some of those people (buyers) are going to continue to go to Texas. They like it better. They said it's an extra 45 minutes.They like it better. It's sort of amazing. A lot of people thought oil would go to 250, 300 dollars. It's not.""Today it's less than 100 dollars. Think of that. When this ends you are going to see it drop like a rock."has reached out to the White House for a comment.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Oil & Energy

Saudi Aramco CEO Warns Strait Disruptions to Delay Oil Market Normalization Until 2027

Saudi Aramco CEO Amin Nasser warned that the ongoing disruptions to oil flows through the Strait of Hormuz could delay the market's return to normalcy until 2027.During the company's Q1 earnings call on Monday, Nasser said that even if these disruptions were to last a few more weeks, "it is going to take a much longer time for the oil market to rebalance and stabilize," dragging all the way into the following year, if the situation stays the same until mid-June.The market is currently losing as much as 100 million barrels of oil each week, as traffic through the strategically crucial strait has dropped to low single digits, Nasser said, according to the transcript of the call available on FactSet.A major reason normalization would take so long, he said, was the massive disruption to global tanker logistics, which he said was now "messed up" with "over 600 vessels" stranded inside the Hormuz and another "240 waiting outside."As a result, he said global energy and commodity supply chains would need "several months to return to their pre-conflict traffic," which he said was based on his optimistic view of things.

Oil & Energy

EMEA Oil Update: Brent Extends Gain as Trump Declares Ceasefire on "Life-Support"

Global oil prices climbed for a second consecutive session on Tuesday, as physical tightening of the market intensified following President Trump's dismissal of a potential Middle East peace deal.The Brent futures contract gained about 2% to $106.32 per barrel. Murban futures closed at $103.60 on May 11 and was not trading as of the time of publishing this oil price update."US President rejected Iran's demands for a total end to Washington's naval blockade and war reparations, calling the response unacceptable," Saxo Bank analysts said.Speaking to reporters at the White House, the US president explicitly rejected Tehran's demands for an end to the US naval blockade and war reparations, stating that the current ceasefire is now on "massive life support."Adding to the supply-side pressure, the US Treasury's Office of Foreign Assets Control sanctioned a network of 12 individuals and entities accused of facilitating the illicit sale of Iranian oil to China.Treasury officials alleged that the Islamic Revolutionary Guard Corps used front companies across Oman, Hong Kong, and the UAE to bypass sanctions and fund regional operations.Traders are now bracing for a wave of data from the three major energy forecasting agencies.The EIA is set to release its outlook later in the day, with OPEC and the IEA following on Wednesday.These reports will be critical in assessing the long-term impact of the 10-week conflict on global reserves, which have already seen significant draws as refineries scramble to replace Middle Eastern barrels, analysts noted.