EMEA Natural Gas Update: Futures Barely Change as Hopes of US-Iran Peace Deal Rekindle
European natural gas futures were mixed on Tuesday amid renewed hopes of a peace agreement between the US and Iran, after US President Donald Trump held off on military strikes against the nation.The front-month Dutch TTF contract rose 0.14% to 50.320 euros ($58.55) per megawatt hour by late trade, while the UK front-month NBP contract was down 0.04% at 123.250 pence ($1.65).In a Truth Social post on Monday, Trump said that he was requested to "hold off on our planned Military attack" against Iran by the leaders of several Arab states, as serious negotiations were now taking place.This comes following Iran sharing a new 14-point proposal with the US, via a Pakistani mediator on Monday, according to a report by state news agency Tasnim.Meanwhile, the strategically crucial Strait of Hormuz remained effectively closed for the 12th week running, with just 8 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.According to Daniel Hynes, a senior commodity strategist at ANZ, European gas markets have continued to tighten, as more flows get rerouted to Asia, where supply constraints due to the Middle East conflict have been felt the most.He also noted that the situation was "exacerbated by potential disruptions to Australian supplies" amid the wave of strikes and work bans at Inpex's Ichthys liquefied natural gas facility.All of this comes at a critical juncture for European markets, with gas inventories at depleted levels, at just 35.56% of capacity, compared to 44.43% during the corresponding period a year ago, according to data from Gas Infrastructure Europe.Similarly, inventory levels are significantly below the five-year average for this period, at 50.1% of capacity, according to the Swiss Federal Office of Energy.