Oil & Energy
EMEA Natural Gas Update: Futures Drop Amid Progress on US-Iran Peace Deal, Rising Hormuz Traffic
European natural gas futures edged lower on Wednesday as the continued progress in US-Iran peace talks further ease supply risks.Front-month Dutch TTF contracts were down 0.90% to 41.635 euros ($47.25) per megawatt hour, while UK NBP futures dropped 1.26% to 99.030 British pence ($1.31) per therm.In a post on Truth Social on Tuesday, US President Donald Trump said he had "agreed to allow the Strait of Hormuz to remain open, with no further naval blockade," a move that could pave the way for the normalization of vessel traffic through the waterway and the gradual restoration of Middle Eastern LNG flows.Traffic through the strategically crucial Strait, which accounted for one-fifth of global LNG flows, touched a new high, with 55 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.This, however, is still below the typical daily average during peacetime, at 138 vessels, according to the UK's Joint Maritime Information Center.According to Daniel Hynes, a senior commodity strategist at ANZ, this comes at a time when China's LNG imports are starting to increase "as it ensures sufficient stockpiles for the peak summer period."This does not bode well for European markets, which are dealing with depleted inventories, at just 46.97% of capacity, compared to 56.23% during the corresponding period a year ago, according to data from Gas Infrastructure Europe.Inventories were also significantly below the five-year average for this period, at 61.4%, according to the Swiss Federal Office of Energy.
