European and British natural gas futures rebounded 1.6% on Tuesday, clawing back part of Monday's steep sell-off. Traders had dumped gas after hopes surfaced for U.S.-Iran talks at the UN, but energy desks pulled back their optimism Tuesday as Persian Gulf supply constraints persist.
European and British wholesale natural gas futures rose 1.6% each on Tuesday as energy desks locked in profits and recalibrated risk following a sharp sell-off earlier in the week tied to diplomatic headlines out of New York.
Gas prices recover from two-week low
The benchmark Dutch front-month TTF contract advanced 1.6% to trade around 78.80 euros per megawatt-hour, recovering from a near two-week low touched in the previous session. In Great Britain, the equivalent NBP wholesale gas contract climbed 1.6% to trade around 195.40 pence per therm, matching the continental bounce.
Both contracts had plummeted over 7% on Monday, recording their worst single-day drop in nearly two months.
Trump-Iran talk prospect sparks optimism, then doubt
The heavy liquidation was triggered by news that U.S. President Donald Trump voiced openness to holding bilateral discussions with Iranian President Masoud Pezeshkian, who is attending the UN General Assembly in New York this week. The prospect of re-initiating direct U.S.-Iran talks sparked hope across commodity bourses that an exit ramp could be found to end the seven-month Middle East war, deflating transit risk premia across the Strait of Hormuz.
However, energy desks dialed back that optimism on Tuesday morning, recognizing that a diplomatic breakthrough remains far from guaranteed while physical supply flows through Persian Gulf choke points remain severely constrained.
Crude eases as bypass routes scale up
Brent crude futures inched lower on Tuesday following a 3% decline in the prior session, aided by reports that energy majors and maritime operators are using overland pipelines and alternate ship-to-ship loading routes off Oman to bypass Persian Gulf transit bottlenecks.
The European Central Bank cautioned in an Economic Bulletin that post-2022 market liberalisation means wholesale gas price surges now pass through to retail inflation within 1 to 3 months across more than half of euro area economies.
Source: Commodities & Futures News
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