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EMEA Natural Gas Update: Futures Slide as Peace Process Survives Renewed US Strikes

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European natural gas futures were down on Wednesday as peace talks appeared to remain on track despite US strikes against Iran earlier this week during a ceasefire.

The front-month Dutch TTF contract was down 2.26% to 46.400 euros ($54.03) per megawatt hour, while the UK NBP front-month contract fell 2.32% to 112.650 British pence ($1.51) per therm.

On Tuesday, Iran's Foreign Ministry condemned the latest US strikes as "an act of bad faith" and "a definitive violation of the ceasefire," but it did not pull out of peace talks being mediated by Pakistan and Qatar.

In a Truth Social post on Tuesday, US President Donald Trump said that Iran's enriched uranium would either be "immediately turned over to the United States to be brought home and destroyed," or destroyed in place, "in conjunction and coordination" with Iran.

Tehran, however, has not agreed to this yet, with a senior official telling Reuters earlier this week that the nuclear issue was not part of the preliminary agreement with the US.

Meanwhile, the Strait of Hormuz, through which one-fifth of global LNG flowed before the war, remained effectively closed for the 13th week running, with just two vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.

This has become a significant concern for European buyers, according to Daniel Hynes, a senior commodity strategist at ANZ, as the Strait's protracted closure has forced Asian buyers to procure supply from LNG spot markets.

At the same time, European markets are grappling with low inventory levels, at just 38.52% of capacity, compared to 46.31% during the corresponding period a year ago, according to data from Gas Infrastructure Europe.

Inventories were also significantly below the five-year average for this period, at 52.5%, according to the Swiss Federal Office of Energy.

This comes at a critical juncture for the region, as it experiences "record-breaking heatwaves" with a heat dome developing over the continent, according to Severe-Weather EU. That means gas-fired power stations will need more fuel to meet demand from air conditioner use.

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