TTF Gas Hits 5-week Low

European natural gas futures rose above €48 per MWh, recouping losses from the previous session amid continued lack of any concrete resolution to the Middle East conflict despite recent optimism. Negotiations to end the war were thrown back into disarray after the White House denied Iran’s claim that a draft peace agreement was making progress. New US strikes on a military site and other targets near the Strait of Hormuz also highlighted risks to ongoing talks. A deal between the two sides could lead to the reopening of the Strait, which has remained largely closed for three months now. Continued disruption has fueled concerns that Europe may face difficulties replenishing inventories ahead of winter, with current storage levels at around 38%, well below the five-year average of more than 50% for this period. Adding to demand-side pressures, Europe is experiencing its first major heatwave of the season, with record temperatures forecast in cities such as London, Paris, and Madrid.

European natural gas futures fell below €47 per megawatt hour as optimism grew that the US and Iran could reach a deal to reopen the Strait of Hormuz, a key route for global energy supplies. Sentiment improved despite conflicting signals from both sides, with Iranian state television reporting an unofficial draft of an interim agreement while the White House dismissed the report as “a complete fabrication.” The Strait normally handles around 20% of global oil and LNG flows, and a reopening would ease pressure on energy markets. Prolonged disruption has raised concerns that Europe may struggle to rebuild gas inventories ahead of winter, with storage facilities currently about 38% full compared with a five year average above 50% for this period. Adding to demand concerns, Europe is facing its first major heat wave of the season, with record temperatures expected across cities including London, Paris and Madrid.

European natural gas futures dropped 5% to around €45 per megawatt hour, the lowest in over two weeks, after Iranian state television said Tehran aims to restore commercial shipping through the Strait of Hormuz to pre-war levels within a month, boosting optimism that the US and Iran are nearing a deal to reopen the key energy route. The Strait is critical for global LNG flows, and prolonged disruption could increase competition for limited supplies, complicating Europe’s efforts to rebuild inventories ahead of winter. European gas storage sites are currently around 38% full, well below the five year average of just above 50% for this time of year, while refilling activity has remained slower than usual. At the same time, Europe is facing its first major heat wave of the season, with temperatures expected to break records across cities including London, Paris and Madrid through the rest of the week.