-- US natural gas futures were down by over 4% on Wednesday after the US and Iran agreed to a two-week ceasefire, marking a major de-escalation in the conflict.
Both the front-month Henry Hub contract and the continuous contract dropped 4.77% to $2.73 per million British thermal units.
In a Truth Social post on Tuesday, US President Donald Trump announced a pause on attacks against Iran, following a successful ceasefire amid mediation with Pakistan.
This was also confirmed by Iran's Foreign Minister Seyed Abbas Araghchi in a post on X, who also added that for a period of two weeks, ships will be allowed safe passage through the Strait of Hormuz, in coordination with Iran's armed forces and subject to "technical limitations."
Even though prices have dropped sharply following the announcement, analysts aren't exactly calling it a clean resolution yet, pointing to lingering uncertainty around key details of the agreement.
Cyril Widdershoven, a geopolitical strategist, was quick to point out that the critical global energy chokepoint, the Strait of Hormuz, "is not open," and was in fact, being "conditionally managed," with Tehran now fully in control.
He also said that despite the drop in natural gas prices, risk premiums for oil, LNG, and shipping markets continued to remain elevated, which he said was a sign of lingering uncertainty.
Gary Cunningham of Tradition Energy expects US natural gas prices to reverse, saying that he sees prices at "$3 for the near term and $3.25 for summer."
Cunningham also noted that LNG faced a tougher road to recovery since "Qatari facilities were hard hit by Iranian strikes," resulting in a significant chunk of global capacity going offline.
Meanwhile, domestic weather conditions continued to turn bearish, with most parts of the country expected to experience above-normal temperatures from April 15 to April 21, according to the National Weather Service.