Europe’s benchmark natural gas prices rose by nearly 2% on Monday morning in Amsterdam as a heatwave in Europe is raising short-term power demand and the U.S.-Iran talks continue amid conflicting messages about the negotiations and renewed threats from U.S. President Donald Trump.
The front-month Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, were up by 1.75% at $49.04 (42.83 euros) per megawatt-hour (MWh) early on Monday in Amsterdam trade, reversing some of the declines from last week. The futures slumped by 6% last week following the announcement of a U.S.-Iran memorandum of understanding to begin talks and try to reach a deal within 60 days.
However, tensions flared up again this weekend, after Iran declared the Strait of Hormuz closed again, the U.S. contradicted the Iranian claim saying millions of barrels of oil are flowing out of the Persian Gulf, and U.S. President Trump threatened to bomb Iran again.
“Iran must immediately stop their highly paid PROXIES in Lebanon from causing trouble. If they don’t, we’ll hit Iran very hard again, just like we did last week, only harder!!!” President Trump posted on Truth Social on Sunday.
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On Monday, mediators claimed the U.S. and Iran had made “encouraging progress” in the first round of the talks in Switzerland.
The European gas futures on Monday reflected the uncertainty about the negotiations, the current heatwave in Europe, and the news of a major incident at Qatar’s Ras Laffan LNG facilities due to a technical failure.
An explosion and a fire during the start-up of operations at Ras Laffan Industrial City injured at least 54 people, with another 18 still unaccounted for as of early Monday, Qatari authorities said.
The incident occurred just as Qatar was preparing to ramp up its LNG output and exports. These were expected to ease the pressure on the gas market as Europe scrambles to refill gas storage sites that were depleted well below the five-year average at the end of the winter.
By Michael Kern for Oilprice.com
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