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EMEA Natural Gas Update: Futures Slide Amid Stalement in US-Iran Talks, Bullish Weather Forecasts

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European natural gas futures slipped on Thursday despite there being no visible progress in talks between the US and Iran, with both sides taking a firmer stance.

Front-month Dutch TTF futures dropped 2.57% to 59.455 euros ($68.61) per megawatt-hour, while UK NBP futures dropped 2.62% to 145.980 British pence ($1.97) per therm.

On Wednesday, Mohammad Reza Naqdi, a general in Iran's Islamic Revolutionary Guard Corps, said that Tehran could prolong its war with the US until President Donald Trump's term ends on January 20, 2029, while speaking to US broadcaster PBS.

Earlier this week, Trump demanded in a Truth Social post that Tehran compensate the US for lives lost and property damaged during Iran's bombing campaign in recent months.

The demand came in response to Tehran's own calls for compensation from Washington, signaling a stalemate between the two sides.

On Thursday, in a post on X, Iran's Foreign Minister Seyed Abbas Araghchi said that the US war effort against Iran was a result of a "miscalculation" due to intelligence failures. "Worse than fake news is fake intelligence. Be careful," he said.

Traffic through the Strait of Hormuz, which accounted for one-fifth of global LNG flows, dropped to 10 vessels on Wednesday, according to ShipFinder.

According to Daniel Hynes, a senior commodity strategist at ANZ, the prospects of a "colder-than-normal winter" are raising concerns surrounding Europe's low gas inventory levels. Hynes also highlighted China's low river and dam levels due to the El Nino, which he said could add to the country's natural gas demand, making things worse for Europe.

European gas inventories stood at 59.32% of capacity, compared to 72.31% 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 76.5%, according to the Swiss Federal Office of Energy.

To make matters worse, long-range weather modelling shows a potential weakening in the Polar Vortex around January 2027, which raises the probability of Arctic air spilling southward into Europe, potentially producing colder-than-average spells and increased snowfall, according to a report by Severe-Weather EU.

This, as expected, adds to the region's heating gas demand, even as most countries across Europe struggle to refill inventories.

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