Oil & Energy
EMEA Natural Gas Update: Futures Edge Higher Despite Reports of US-Iran Ceasefire Extension
European natural gas futures were up on Thursday, despite reports of the US and Iran considering an extension to the current ceasefire by two more weeks, to allow more time to negotiate a peace agreement.The front-month Dutch TTF contract rose 1.85% to 42.16 euros ($49.67) per megawatt-hour, while UK NBP futures rose 2.06% to 105.81 British pence ($1.43) per therm.The ceasefire, which ends on Tuesday, could be extended as negotiators on both sides plan to hold technical talks, which will cover the reopening of the Strait of Hormuz and Iran's nuclear enrichment, according to a Bloomberg report, citing a person familiar with the matter.Meanwhile, the US Central Command has released audio recordings of US Naval vessels enforcing the blockade against Iran, with commercial ships being threatened with "interdiction and seizure" for transiting to and from Iranian ports.Timothy Lawn, a retired US Army Sergeant Major, said on Wednesday that the US decision to blockade Iran, thus preventing the country from supplying energy to China, which accounted for 90% of its crude oil shipments in 2024 and 2025, has led Tehran to "return in a more conciliatory mood to the negotiating table."Lawn flagged Iran's reliance on Chinese inputs for its weapons and missile programs, a vulnerability now exposed by the blockade.During a news briefing on Thursday, US Secretary of Defense Pete Hegseth warned Iran that US forces in the Middle East were ready to restart combat operations against Iran on a moment's notice, if the country fails to agree on a peace deal."If Iran chooses poorly, then they will have a blockade and bombs dropping on infrastructure, power and energy," he warned.Transit through the Strait has edged higher, with 19 vessels passing through it over the past 24 hours, according to the Hormuz Strait Monitor.This is still significantly below the typical daily average of 138 ships per day, according to the UK's Joint Maritime Information Center.As such, Daniel Hynes, a senior commodity strategist at ANZ, noted that traders remained mindful of the fact that "supplies remain severely constrained" with the Strait still being effectively closed, despite growing optimism regarding a potential peace deal.He attributed the recent pullback in energy prices to the unwinding of "large net long positions recently accumulated by investment funds."European gas inventories continued to see net injections, with storage still lower at 29.55% of capacity, compared to 35.97% during the corresponding period a year ago, according to Gas Infrastructure Europe.