Oil & Energy
EMEA Natural Gas Update: Futures Slide Amid Reports of Progress in US-Iran Talks
European natural gas futures retreated sharply on Monday, pulling back from a four-month high, amid reports of progress being made on the diplomatic front between the US and Iran.The front-month Dutch TTF contract was down 7.20% at 58.995 euros ($67.15) per megawatt-hour, while the front-month UK NBP contract dropped 7.28% to 142.890 British pence ($1.90) per therm.US forces refrained from launching fresh strikes against Iran over the weekend, with Tehran likewise suspending retaliatory attacks on US bases across the region after nearly two weeks of steady escalation in the conflict, according to a report by Al Jazeera.Tehran and Washington were also reportedly exchanging messages via intermediaries, restoring hopes for a potential diplomatic resolution to the hostilities.Mediators have also achieved success in getting the two sides back to negotiations, thus averting an all-out war in region, according to a report by Associated Press, citing two regional officials familiar with the matter.Meanwhile, traffic along the strategically crucial Strait of Hormuz, which accounted for one-fifth of global LNG flows, dipped to just 9 transits on Sunday, according to data from ShipFinder.However, Daniel Hynes, a senior commodity strategist at ANZ, noted that Europe still has to "compete hard for available cargoes," due to the ongoing restrictions on LNG flows from Qatar. He also said that the situation was made worse by strong demand in Asia, amid the higher-than-average temperatures in the region.European gas inventories were below historic averages, at 55.35%, compared to 66.47% during the corresponding period a year ago, according to Gas Infrastructure Europe.Inventories were also significantly below the five-year average for this period, at 71.2%, according to the Swiss Federal Office of Energy.The unprecedented heatwave across Europe is set to give way to severe hail and thunderstorms this week, primarily over the Mediterranean region, according to a report by Severe Weather EU, which is set to provide relief from the space cooling demand and gas-fired power burn.
