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EMEA Natural Gas Update: Prices Ease on Ceasefire between Iran and Israel

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European natural gas futures fell further in after-hours trading on Tuesday following Iran and Israel's agreement to a ceasefire, easing some concerns over ongoing disruptions to energy supplies.

The Dutch TTF front-month contract fell 2.862% to 48.40 euros ($55.88) per megawatt-hour, while the UK NBP front-month contract declined 3.344% to 116.50 British pence ($1.56) per therm.

Market sentiment eased following the ceasefire announcement, although geopolitical risks remained in focus. Iran on Tuesday warned Israel against continuing military operations in Lebanon after Israeli forces carried out fresh strikes on the southern Lebanese city of Tyre earlier in the day, CNN reported.

Prices also eased on multiple news reports that a fifth Qatari liquefied natural gas cargo exited the Strait of Hormuz, reinforcing expectations that supply bottlenecks are easing and allowing inventories to be replenished ahead of the winter heating season.

Currently, EU inventories were pegged at 42.48% of capacity, versus 50.97% a year ago, Gas Infrastructure Europe said. Inventories were also significantly below the five-year average of 56.7%, the Swiss Federal Office of Energy said Tuesday.

European LNG imports remained stable last week at 2.0 million tonnes across 35 cargoes, broadly in line with the four-week average, according to data from Vortexa.

However, LNG arrivals into France and Italy fell to around two-year lows. France received 0.2 million tonnes across three cargoes, while Italy imported 0.1 million tonnes in two cargoes. Maintenance work at France's 8-million-tonnes-per-annum Montoir LNG terminal is expected to conclude on June 9-10, while the similarly sized Fos Cavaou terminal is scheduled to undergo maintenance June 13-29, Vortexa said.

In contrast, German LNG imports rose to 0.3 million tonnes across five cargoes, the highest weekly level since March, but EU LNG send-out averaged 3,400 gigawatt-hours per day during the week, down about 12% from May's average, Vortexa said.

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