FINWIRES · TerminalLIVE
FINWIRES

EMEA Natural Gas Update: Futures Slide Amid Hopes of US-Iran Peace Deal

By

European natural gas futures edged lower on Thursday, amid growing optimism surrounding a lasting peace deal between the US and Iran.

The front-month Dutch TTF gas contract fell 1.09% to 48.885 euros ($56.87) per megawatt hour, while the UK front-month NBP contract dropped 1.17% to 119.300 British pence ($1.60) per therm.

US President Donald Trump continued to express optimism in favor of a peace deal with Iran, while reportedly sticking to a diplomatic way forward, despite tense conversations with Israeli President Benjamin Netanyahu on Wednesday, who remained skeptical, according to a report by Axios.

Meanwhile, the US has reportedly sent a new text to Iranian leaders via Pakistan, which is currently being reviewed by the country's senior leaders, according to the Tasnim News Agency.

The strategically crucial Strait of Hormuz, which accounted for one-fifth of global LNG flows, remained effectively closed for the 12th week running, with just two vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.

This, however, failed to quell supply concerns in European markets, as Norway, the region's biggest piped gas supplier, said that it "will see capacity cuts deeper than previously expected over the next week," as more seasonal work is expected at the Troll gas field, Daniel Hynes, a senior commodity strategist at ANZ said.

Europe is currently also grappling with depleted gas inventories, which are currently at 36.87% of capacity, compared to 44.93% during the corresponding period a year ago, data from Gas Infrastructure Europe said.

Inventories were also significantly below the five-year average for this period, at 50.6% of capacity, according to the Swiss Federal Office of Energy.

These factors coincide with a late-May heatwave forecast across the region, with much of Europe expected to experience a 'heat dome' phenomenon. Countries including Spain and Portugal are projected to see temperatures climb into the mid-to-upper 30s Celsius, likely boosting cooling-related gas demand, according to Severe Weather Europe.

Related Articles

Oil & Energy

EMEA Oil Update: Brent Recovers as Traders Assess Potential Iran Deal

Brent crude futures recovered on Thursday, after a selloff in the previous session, as investors parse a new Iran deal and afterr the US reported a massive drop in inventories.The Brent futures contract added 1.3% to $106.42 per barrel. Murban futures closed at $103.22 on May 20 and were not trading by the time of publication of this oil price update.On Wednesday, the US president said that negotiations with Iran are in their "final stages," raising optimism for a deal."Oil prices sold off heavily yesterday, with hopes growing once again for a potential US-Iran agreement," ING analysts said. Brent futures dropped more than 5% on Wednesday.Analysts at ING noted that while the market has been burned by false breakthroughs before, it remains highly reactive due to the sheer significance of ongoing supply disruptions.On the supply side, the US Energy Information Administration noted that US crude oil inventories decreased by 7.9 million barrels to 445 million barrels for the week ended May 15.

Oil & Energy

US Oil Update: Futures Plunge 4% as Trump Says Iran Talks in 'Final Stages'

Crude oil prices tumbled in after-hours trading on Wednesday after President Trump said that the US and Iran are in the "final stages" of negotiations to end the Middle East conflict, which is now in its twelfth week.Front-month West Texas Intermediate crude futures plunged by 4.87% to $99.08 per barrel, while Brent futures plummeted by 5.39% to $105.28/bbl.US crude oil inventories decreased by 7.9 million barrels to 445 mmbbls in the week ended May 15, the Energy Information Administration said in its weekly report on Wednesday.Crude oil input to refineries decreased by 80,000 barrels per day from the previous week to average about 16.3 mmb/d in the week ending May 15, while crude oil production dropped by 8,000 b/d to 13.7 mmb/d.Saxo Bank strategists said that Trump warned that US strikes on Iran could resume within days if peace talks fail, adding to market volatility.Trump on Wednesday said that negotiations with Iran were in the final stages, while warning of further attacks unless Iran agrees to a deal.Though a fragile ceasefire was reached in April, talks to end the conflict have shown little progress so far. Earlier this week, Trump said he came close to ordering more attacks but held off to allow more time for negotiations.On Wednesday, the US President said "we'll see what happens" with Iran, adding that a deal will be made or "we're going to do some things that are a little bit nasty, but hopefully that won't happen."Iran's Revolutionary Guard threatened to extend the Middle East conflict "beyond the region" if the US and Israel resume attacks against Tehran."If aggression against Iran is repeated, the regional war that had been promised will this time be drawn beyond the region, and our crushing blows will lay you in black dust in places you cannot imagine," the IRGC said on Wednesday.Iranian foreign ministry spokesperson Esmaeil Baghaei said Iran was ready to develop protocols for safe shipping traffic in cooperation with other coastal states, without providing further details.The ongoing Middle East conflict has effectively closed the Strait of Hormuz, a critical waterway that handles about 20% of global oil and liquefied natural gas supplies, creating the world's largest oil supply disruption, according to the International Energy Agency.The US Navy boarded the Iranian-flagged commercial oil tanker M/T Celestial Sea in the Gulf of Oman on Wednesday after suspecting it had violated a US blockade, US Central Command said in a statement.The military has redirected 90 Iran-linked commercial vessels and disabled four others since imposing the blockade on April 13.Kpler said the US blockade of Iranian ports is emerging as a central pressure point in the Trump administration's Iran strategy, with no Iranian crude tanker crossing the designated blockade line since April 13.Crude loadings have fallen to about 640,000 barrels per day from about 2.1 million b/d previously, the data showed.

Oil & Energy

Market Chatter: Nigeria Oil Output Hits 1.6 Million b/d as Producers Boost Drilling

Nigerian oil producers are accelerating drilling plans as the Iran conflict and disruptions to the Strait of Hormuz push crude prices above $100 per barrel, Bloomberg reported on Wednesday.Independent producers pumping below 50,000 barrels per day are accelerating spending after buying oil assets divested by international companies over the past several years, the analysis said.Former Exxon Mobil (XOM) manager Wisdom Enang said smaller operators could increase combined production by 200,000 b/d to 300,000 b/d before year-end as tighter global supply boosts demand for Nigerian crude.Nigeria lifted oil production to 1.6 million b/d in April, marking the country's biggest monthly increase in almost three years, according to the report.President Bola Tinubu has pushed reforms to attract investment into the oil sector through tax incentives, quicker contract approvals and management changes at the national oil company.Oando Energy Resources plans to drill additional wells and raise output 30% to 42,500 b/d by year-end after acquiring Eni assets in 2024, Chief Executive Officer Wale Tinubu told Bloomberg.Tinubu added that the company is accelerating a five-year strategy to double production and benefit from supply shortages created by the Middle East conflict.Petralon Energy advanced plans for a third well after crude prices moved well above its $65/bbl base-case forecast shortly after the company drilled a second well.Petralon Chief Executive Officer Ahonsi Unuigbe said additional drilling should increase the company's production 56% to 7,500 b/d before year-end.Pan Ocean Oil and Newcross Companies, which jointly produce 48,000 b/d, restarted two wells after the conflict began and are using higher revenue to fund expansion projects and reduce debt.(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.)

$XOM