Oil & Energy
EMEA Natural Gas Update: Futures Slip Despite Fragile Ceasefire, Persistent Iran Attacks
European natural gas futures were down on Friday, despite the fragile nature of the ceasefire between the US and Iran, and Tehran's continued attacks against regional energy infrastructure.The front-month Dutch TTF contract fell 2.06% to 45.22 euros ($52.81) per megawatt-hour, while UK NBP futures lost 2.36% to 114.00 pence ($1.50) per therm. Dutch TTF was set to end the week down by 9.58%, while UK gas was down 9.73%, according to data from Trading Economics.Iran's state-run media, on Friday, dismissed reports of senior officials visiting Pakistan to hold diplomatic talks with the US, according to a report by the Hindustan Times.The Tasnim News Agency reportedly reiterated the country's stance on the peace talks, saying, "As long as the [US] does not fulfill its commitment to the ceasefire in Lebanon and the Zionist regime continues its attacks, the negotiations are on hold."Meanwhile, Tehran continued targeting regional energy infrastructure, striking a key Saudi pipeline facility on Thursday and disrupting roughly 700,000 barrels per day of oil flows, according to various news outlets.Sultan Ahmed Al Jaber, the CEO of Adnoc, the UAE's state-owned oil company, said that despite the ceasefire being announced earlier this week, the Strait of Hormuz was not open.Access to the crucial Strait, which handles 20% of global LNG flows, he said, was still being "restricted, conditioned and controlled," in a social media post on Thursday.As the Strait's closure is set to enter its seventh week, just 9 vessels transited through it over the past 24 hours, according to the Hormuz Strait Monitor.This is in sharp contrast to the typical daily average of 138 ships per day, according to the UK's Joint Maritime Information Center, which noted that there were no new vessel attacks over the past 24 hours.Daniel Hynes, a senior commodity strategist at ANZ, said there was "no end in sight to the impasse," as LNG tankers continued to remain stuck in the Persian Gulf.Hynes also added that the resulting supply tightness was being compounded by the outages in Australia's LNG facilities, with Chevron's Wheatstone gas facility operating at jsut 50% of capacity, due to damage from Cyclone Narelle last month.All of this comes at a critical juncture for European markets, as the region enters refilling season with low inventories, at just 28.92% of capacity, compared to 34.97% last year, according to data from Gas Infrastructure Europe.