European natural gas futures extended gains in after-hours trading Thursday, holding firm despite diplomatic signals that could ease geopolitical tensions in the Middle East.
The front-month Dutch TTF contract rose 1.766% to 42.13 euros ($49.63) per megawatt-hour, while UK NBP futures climbed 1.785% to 105.52 British pence ($1.43) per therm.
Prices traded above 42 euros/megawatt-hour but remained near their lowest levels in more than six weeks, as markets balanced tentative progress toward de-escalation against ongoing supply risks, Trading Economics said.
News reports indicated the US and Iran are engaged in indirect talks to extend a current two-week ceasefire beyond its Apr. 22 expiry, potentially allowing more time for negotiations tied to the broader US-Israel-Iran conflict. Separately, Lebanon and Israel were also reported to have agreed to a ceasefire on Thursday.
However, uncertainty persists around the Strait of Hormuz, a critical chokepoint for global energy flows through which roughly one-fifth of LNG shipments pass. The waterway remains heavily disrupted, with the US blockading Iranian shipping and Tehran restricting passage for most other vessels.
Chairman of the US Joint Chiefs of Staff, General Dan Caine, said in a Thursday press briefing that the US blockade applies only to Iranian ports and coastline, not the Strait itself. He added that US Central Command had not boarded any vessels in the area as of Thursday morning, while noting that similar maritime interdiction actions are being conducted in the US Indo-Pacific Command area of responsibility against ships that departed before the blockade was imposed.
Caine said 13 ships had turned around and opted not to transit the Strait, up from six vessels cited earlier in the week.
Supply concerns were also compounded by expectations that Qatar's Ras Laffan facility, the world's largest LNG export complex, will not return to full operations until August, even if restart efforts begin in May, Trading Economics reported.
Traders were also weighing improving peace prospects against lessening natural gas needs as winter heating demand fades and renewable energy output strengthens. Natural gas inventories remain below 30% of capacity in the EU, and restocking ahead of winter has started.
Meanwhile, investment funds reduced their net long positions in TTF by 37 terawatt hours to 271 TWh in the week ended Apr. 10, Investing.com reported, citing information from ING.
"Clearly, the longer disruptions in the Middle East persist, the more competition we'll see from Asia as buyers seek alternative supplies," ING analysts wrote.
In Asia, LNG prices edged lower, though supply constraints remain a key concern, ANZ analyst Daniel Hynes said in a note Thursday.
Asian LNG imports have fallen to their lowest levels since 2020. China's 30-day moving average for LNG imports stood at 108,000 tonnes as of April 14, down 32% from a year earlier, Hynes added.