EMEA Natural Gas Update: Futures Ease as Heat Shifts East, Low Storage Provides Support
European natural gas futures eased in after-hours trading on Wednesday as extreme heat shifted eastward, although forecasts for another heatwave next week and concerns over global LNG supplies continued to underpin the market.The front-month Dutch TTF contract fell 0.82% to 43.09 euros ($49.05) per megawatt-hour, while the UK front-month NBP contract declined 2.19% to 102.16 British pence ($1.36) per therm.Temperatures are expected to moderate across much of France on Wednesday and Thursday before rising again from Friday, particularly in the country's southern regions, according to French newspaper Le Monde. However, the duration, intensity and geographical extent of the next heatwave remain uncertain, it said.Analysts at Mind Energy said the recent heatwave and the prospect of further high temperatures across Europe are supporting gas demand. Higher river temperatures have also reduced the availability of French nuclear power, increasing the need for gas-fired generation at a time when European gas storage levels remain below normal."Meanwhile, the Middle East truce still stands, but the permanent peace talks appear to be in somewhat of a stalemate," it said.Supply risks from the Middle East also remained in focus. US envoys arrived in Doha on Tuesday for talks, although Qatari mediators cautioned that no major breakthrough was expected, noting that US officials were not scheduled to meet directly with Iranian counterparts.After a fatal restart incident, QatarEnergy has extended force majeure on LNG shipments to Europe.Kpler said in a social media post on Wednesday that the Strait of Hormuz remained open on June 30, with 34 verified vessel transits, including commercial cargo ships, energy tankers and support vessels, moving through the strategic chokepoint.However, shipping tracker HormuzStraitMonitor.com reported on Wednesday that only five vessels had transited the strait over the previous 24 hours, while roughly 450 ships were waiting to pass.Persistent cooling demand and concerns over supply disruptions are complicating Europe's efforts to rebuild gas inventories ahead of winter.European Union gas storage sites were 48.87% full, according to Gas Infrastructure Europe, well below the 56% level recorded a year earlier and the five-year average of 63.5%, as calculated by Switzerland's Federal Office of Energy.European buyers are also facing increased competition for LNG cargoes from Asia. North Asian spot LNG prices rose as disruptions to Qatari exports prompted more importers to seek spot cargoes, ANZ analyst Daniel Hynes said on Wednesday.
