Gas Prices In Europe Are Falling Following The Signing Of A Memorandum Between The U.S. And Iran

And also against the backdrop of an increase in the number of ships passing through the Strait of Hormuz.

Wholesale gas prices in the Netherlands and the United Kingdom are falling.

As of 12:20 p.m. Moscow time, front-month gas futures on the Dutch TTF hub had fallen by 2.68% to 40.79 euros per megawatt-hour.

Gas futures for next-month delivery in the UK fell by ‌2.02% to 97.76 pence per therm.

U.S. President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding, drafted in English and Farsi. However, at the same time, ‌Trump, while attending the G7 summit in France, threatened to resume attacks and target Iranian officials if the terms of the agreement are not fulfilled.

“Already this morning, there has been noticeably ‌more active ship traffic in the Strait… the peace agreement has already been priced in, and the final signature is still an important confirmation, so prices are likely to show a bearish trend,” said LSEG analyst Ulrich Weber.

In terms of fundamental factors, air temperatures in Northwestern Europe are already 5 degrees Celsius above normal and are expected to rise by another 2.2 degrees on average over the next 24 hours, reaching 25 degrees. According to LSEG, demand for heating gas will drop by 71 gigawatt-hours per day to 502 gigawatt-hours per day.

Wind power generation under current weather conditions will remain low at least until the beginning of next week. At the same time, solar power generation is significantly above normal, which reduces demand for gas from power plants.

The total volume of Norwegian gas export requests is projected to increase by 16 million cubic meters per day to 303 million cubic meters per day as maintenance work at the Kollsnes gas field is completed, according to LSEG data.

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