Europe gas prices fall on weak demand despite U.S.-Iran peace talks impasse

EU gas stocks are 59.32% full – the lowest for this time of year in records going back to 2011 and 12.99 percentage points below last year’s level, data from Gas Infrastructure Europe shows.

While concerns persist over the refilling of EU depleted storage facilities before winter, North Asia LNG prices rose as the current geopolitical situation and forecasts of a cold winter are expected to drive competition for LNG cargoes.

"The prospect of a colder-than-normal winter is raising concerns around market tightness in coming months. This comes as the El Nino weather system has left China’s rivers and dams so low that it could disrupt hydro-power supply. That would increase demand on natural gas as an energy source," said Daniel Hynes, senior commodity strategist at ANZ.

In the European carbon market, the benchmark contract inched higher by €0.50 to €82.49 per metric ton.

Iran and the United States remain at loggerheads over efforts to agree a permanent end to the war in the Gulf, according to a senior Iranian source, who said there had been no progress in talks to revive the interim deal agreed in June and define a timeframe to implement it.

"An impasse in U.S.-Iran peace talks has dashed hopes for resumed LNG supply. Prices are, however, constrained by comfortable fundamentals," said LSEG gas analyst Dzmitry Dauhalevich.

As temperatures across north-west Europe peak today, demand remains weak and gas-for-power demand is down due to strong solar output. Meanwhile, supply from Norway remains stable, LSEG data showed.

Benchmark Dutch and British wholesale gas prices eased on Thursday, pressured by ample supplies and sluggish demand despite little progress in U.S.-Iran peace talks.