Financial Wire

EMEA Natural Gas Update: Futures Slide After Trump Expresses Optimism Over Iran Peace Deal

-- European natural gas futures were down on Friday after US President Donald Trump expressed strong optimism over a peace deal with Iran.

The front-month Dutch TTF contract dropped 1.23% to 41.90 euros ($49.37) per megawatt-hour, while UK NBP futures dropped 1.03% to 105.20 British pence ($1.42) per therm.

On Thursday, Trump said Iran was willing to hand over its "nuclear dust" to the US, which refers to the country's enriched uranium, which was buried underground following US airstrikes last year.

Speaking with the press at the South Lawn of the White House, Trump said that Iran had agreed not to have nuclear weapons and that the two sides were "very close" to making a deal.

Media reports say Iran has not commented on this commitment, leaving some room for doubt, with Iran having previously denied other commitments Trump said were agreed upon.

Meanwhile, the US naval blockade against Iran remains in full effect, with US Centcom releasing footage showing a naval helicopter guiding a merchant vessel away.

The Strait of Hormuz, which usually handles 20% of global LNG flows, was effectively closed for the seventh week running, with just eight vessels passing through over the past 24 hours, according to the Hormuz Strait Monitor.

Fatih Birol, head of the International Energy Agency, has warned that even if the Strait were to reopen soon, it would take at least two years for energy output in the Middle East to return to normal.

In an interview with the Neue Zuercher Zeitung newspaper on Friday, Birol said that this will vary across different countries, "Iraq, for example, will take much longer than in Saudi Arabia," he said.

This comes at a difficult juncture for European natural gas markets, with inventory levels at just 29.56% of total capacity, compared to 35.97% last year, according to Gas Infrastructure Europe.

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EMEA Natural Gas Update: Futures Slide After Trump Expresses Optimism Over Iran Peace Deal | Financial Wire