EMEA Natural Gas Update: Futures Plummet After Iran Strike Pause Eases Supply Risk Concerns
European natural gas futures fell sharply in after-hours trading Monday, retreating from a four-month high as markets reacted to a pause after nearly two weeks of US military strikes against Iran and a renewed focus on diplomacy.The front-month Dutch TTF contract dropped 8.934% to 57.895 ($65.90) per megawatt-hour, while the front-month UK NBP contract declined 9.344% to 139.710 pence ($1.86) per therm.US President Donald Trump has temporarily halted further military strikes against Iran, saying the pause would provide "space" for negotiations. Trump said the US remained engaged in talks with Tehran but warned that military action could resume if discussions failed.The market pullback came despite continued concerns over Europe's tight gas supply position. Gas storage levels across the region remained below historical norms, with inventories at 55.35% of capacity compared with 66.47% at the same time last year, according to Gas Infrastructure Europe. Stocks were also well below the five-year average of 71.2% for the period, data from the Swiss Federal Office of Energy showed.However, high prices contributed to reduced imports. LNG deliveries fell to their lowest weekly level since 2021, totaling 1.0 million metric tons across 22 cargoes, extending a weak summer demand trend, Vortexa said in a Monday note. The region's 28-day average LNG import rate was around 30% below year-earlier levels.However, it said shifting global price dynamics could attract additional LNG supplies later in the year. The Atlantic basin arbitrage has turned more favorable for Europe heading into the shoulder season and winter, potentially encouraging increased cargo flows from September onward.In the meantime, regional LNG arrivals remained uneven. France received no LNG cargoes during the week for the first time since March 2023, as prompt TTF prices traded above France's PEG hub, reducing incentives for deliveries. Belgium also recorded its first cargo-free week in a year. Germany bucked the broader trend, with LNG imports rising 10% above their four-week average.Italy's LNG imports held steady at 0.3 million metric tons despite a suspension of gas send-out operations at the Ravenna floating storage and regasification unit since July 19.European importers compete for cargoes with Asian buyers. The Asian price, Trading Economics said, rose 43% over the past month and is up by more than 85% over this time last year.Vortexa assessed Northwest European LNG prices at $20.30/MMBtu, while Trading Economics put the JKM price at $22/MMBtu.
