Related Articles
Commodities
EMEA Natural Gas Update: Prices Fall as Trump Weighs Iranian Peace Plan
European natural gas futures fell in late Friday trade as markets weighed geopolitical risk tied to a proposed US-Iran ceasefire extension and its potential impact on global energy routes.The Dutch TTF front-month contract fell 1.237% to 46.37 euros ($54.11) per megawatt hour, while the UK NBP front-month contract declined 0.952% to 112.35 British pence ($1.51) per therm.Trading was dominated by uncertainty out of Washington, where US President Donald Trump and senior officials were meeting to decide upon a proposal aimed at resolving the conflict in the Middle East. In a Truth Social post, Trump said Iran must permanently abandon any pursuit of nuclear weapons and called for the immediate reopening of the Strait of Hormuz without tolls. He also warned that any naval mines in the waterway would be destroyed and indicated that US forces would end their blockade of the strait.The Strait of Hormuz remains one of the most sensitive chokepoints in global energy supply, carrying roughly 20% of global oil and LNG flows. Markets have been on edge since escalating disruptions earlier in the year, including a US blockade of Iranian ports and reciprocal restrictions in the region, which have contributed to heightened volatility in energy prices.Fundamentals in Europe continue to add pressure. Gas storage levels across the EU stand at 39.13% of capacity, down from 46.88% a year earlier and well below the five-year average of 52.8%, according to Gas Infrastructure Europe and the Swiss Federal Office of Energy.Trading Economics warned that ongoing supply disruptions could complicate efforts to rebuild inventories ahead of winter. At the same time, Europe is contending with an early-season heatwave, with cities including London, Paris and Madrid forecasting record temperatures.Severe Weather Europe reported that 31 of 126 long-running monitoring stations logged their highest-ever May temperatures, with the most extreme readings concentrated in northeastern Spain.Weather forecasters expect conditions to shift next week as Atlantic systems bring a more unsettled and windier pattern across parts of Europe, though some models suggest easing wind activity into mid-June.Regarding LNG, ANZ analyst Daniel Hynes said prolonged disruption in the Strait of Hormuz is tightening availability and increasing competition among buyers. Spot LNG demand has firmed in North Asia, while Indian importers are also stepping up purchases amid a heatwave there.
Commodities
US Natural Gas Exports Hit Record High as LNG Shipments Surge in March, EIA Says
US dry natural gas production rose 3.3% over the year to 110.9 billion cubic feet per day in March, marking a 12th straight monthly increase, the US Energy Information Administration said in the Natural Gas Monthly update on Friday.Producers generated 3,438 Bcf of dry natural gas in March, the second-highest monthly level on record since 1973 and the highest ever for the month of March.Gross withdrawals climbed to 4,201 Bcf, or 135.5 Bcf/d, setting a March record dating back to 1980, according to the agency.US consumers used an estimated 2,779 Bcf of natural gas during the month, equivalent to 89.6 Bcf/d, up 1.0% from 88.7 Bcf/d a year earlier.Residential demand fell 8.7% over the year to 15.5 Bcf/d from 17.0 Bcf/d, reaching its lowest March level since 2016, the report showed.Commercial deliveries declined 4.4% to 11.3 Bcf/d from 11.8 Bcf/d, while industrial consumption edged down 0.5% to 23.9 Bcf/d from 24.0 Bcf/d.Industrial natural gas consumption declined 0.5% over the year to 23.9 Bcf/d from 24.0 Bcf/d, marking the lowest March level since 2021, the EIA said.Electric utilities increased natural gas use by 10.6% over the year to 29.6 Bcf/d from 26.8 Bcf/d, providing the strongest growth among end-use sectors.Net natural gas exports reached a record 652 Bcf, or 21.0 Bcf/d, the highest monthly level since the government began tracking trade data in 1973.The US exported 3.7 times as much natural gas as it imported in March, as imports declined and exports increased from year-earlier levels, the report showed.Imports dropped 9.1% to 7.7 Bcf/d from 8.5 Bcf/d, marking the lowest March import rate since 2021, according to the agency.Exports increased 18.3% to 28.7 Bcf/d from 24.3 Bcf/d, establishing a new record for any month since 1973.Liquefied natural gas exports advanced 25.1% over the year and reached the highest monthly level since LNG export tracking began in 1997, the EIA added.The US shipped 18.5 Bcf/d of LNG to 34 countries during March, supporting the record export performance, the agency said.
Commodities
EU Approves $10.5 Billion Spanish Capacity Plan to Secure Electricity Supply
The European Commission has approved a 9 billion euro ($10.51 billion) Spanish capacity mechanism aimed at securing electricity supply during periods of system stress, clearing the plan under EU State aid rules.The scheme will run for 10 years from May 2026 and operate alongside Spain's existing electricity market. Its purpose is to ensure that backup resources are available when normal market conditions are insufficient to meet demand.Under the system, Spain's transmission system operator determines how much backup capacity is required to meet a national reliability standard. That standard sets the maximum number of hours per year in which electricity demand can go unmet before supply security is deemed unacceptable.To meet that requirement, Spain will hold competitive auctions in which power generators, battery storage operators and demand-response providers compete for contracts.These contracts do not pay for electricity produced but for being available to respond when needed. Participants bid the price at which they are willing to keep capacity ready, and contracts are awarded to the lowest-cost offers.Once contracted, these resources remain on standby under normal conditions. They continue to participate in regular electricity markets but must be prepared to respond when the system is under stress, such as during periods of unusually high demand or unexpected supply shortages.When such scarcity events occur, the system operator can call on contracted resources to restore balance. Power plants may increase output, battery systems may discharge into the grid and industrial consumers enrolled in demand response schemes may temporarily reduce consumption.At all other times, electricity flows through standard wholesale markets without intervention from the capacity mechanism. Additionally, the system is designed to avoid continuous control or forced switching, instead relying on financial incentives to ensure availability when needed.The Commission said the measure is necessary to guarantee security of supply and is proportionate because payments are determined through transparent auctions that limit overcompensation and reduce the risk of market distortion.It also noted that the scheme is open to both existing and new assets located in Spain, with the potential for broader participation from interconnected EU markets in the future.The program is estimated to cost about 900 million euros per year, depending on auction outcomes, and was approved under Article 107(3)(c) of the EU Treaty and the Commission's 2022 State aid guidelines for energy and climate policy.