EMEA Natural Gas Update: Futures Rise Despite Reports of Ceasefire Extension Between the US, Iran
European natural gas futures were up on Thursday, amid 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 1.96% to 42.21 euros ($49.72) per megawatt-hour, while UK NBP futures rose 1.91% to 105.65 British pence ($1.42) per therm.The ceasefire, which was set to end on the coming Tuesday, could be extended further, as negotiators on both sides plan to hold technical talks, which include 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.Transit through the Strait, however, inched 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.