Europe Gas-Prices steady as U.S.-Iran deal prospects fade
XLE•Demand and supply factors
On the demand side, gas-for-power demand is slightly bearish due to an increase in solar generation, which should offset a slight decrease in wind output, according to LSEG data.
French nuclear availability is expected to be 1.3 gigawatts higher for the day-ahead, which could also dampen gas demand.
EU gas stocks are 61.37% full – the lowest for this time of year in records going back to 2011 and 12.5 percentage points behind last year’s level, data from Gas Infrastructure Europe showed.
Storage and winter price risk
"Low storage levels are naturally increasing the risk of heightened winter price volatility, which could be accentuated by tight supply fundamentals and weather factors such as cold spells or slow wind patterns," Gergely Molnar, gas analyst at the International Energy Agency, said in a LinkedIn post.
In the European carbon market, the benchmark contract CFI2Zc1 was down €0.23 at €82.08 per metric ton.
European gas prices hold in narrow range
Benchmark Dutch and British wholesale gas prices traded in a narrow range on Wednesday morning amid soft demand and strong supply while prospects for a deal to end the nearly six-month U.S.-Iran conflict receded.
The benchmark Dutch front-month contract at the TTF hub TFMBMc1 fell by €0.45 to €63.19 euros per megawatt hour (MWh) by 0815 GMT, ICE data showed.
The British front-month contract NGLNMc1 rose by 1.28 pence to 155.77 pence per therm.
Iran-U.S. talks and Strait of Hormuz concerns
A 60-day deadline set by a June memorandum of understanding between Iran and the U.S. to reach a final peace agreement lapsed on Monday. U.S. President Donald Trump said on Tuesday no talks were taking place with Iran and insisted the Strait of Hormuz was open, contradicting Iran's assertion that the critical waterway remained shut to shipping.
