European natural gas futures were down on Tuesday after US President Donald Trump said that talks with Iran were continuing to make progress.
The Dutch TTF front-month contract was down 2.65% to 47.790 euros ($55.67) per megawatt-hour, while the UK NBP front-month contract dropped 2.88% to 115.660 British pence ($1.55) per therm.
In a Truth Social post on Monday, Trump said that talks were continuing "at a rapid pace," helping calm market concerns following a renewed wave of airstrikes over the weekend that had cast doubt on the prospects for a peace deal.
Meanwhile, the strategically crucial Strait of Hormuz, which accounted for one-fifth of global LNG flows, remained effectively closed for the 14th week, with just 4 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.
Prices also eased after Iran's President Masoud Pezeshkian said that the country would allow Japanese vessels to pass through the Strait with "greater ease and without problems," according to the IRNA. This could help reduce the pressure on spot LNG markets, according to Daniel Hynes, senior commodity strategist at ANZ.
This could provide some relief for European markets, where gas storage levels remain below year-ago levels, as reduced competition from Asian buyers may ease pressure on LNG supplies, Hynes said.
European gas inventories stand at 40.48% of capacity, compared to 48.34% during the corresponding period a year ago, according to Gas Infrastructure Europe.
Inventories were also significantly below the five-year average for this period, at 54.4%, according to the Swiss Federal Office of Energy.
This comes during an unprecedented heatwave across Europe, which has "obliterated historical temperature records," according to Severe-Weather EU, leading to increased air conditioner usage, which in turn results in higher power gas burn in the region.