Gas prices in Europe fall amid hopes that the Iran war will end soon
The benchmark Dutch and British wholesale gasoline prices dropped on Wednesday morning, based on the hope that the Middle East conflict would soon be resolved following the comments of U.S. president Donald?Trump.
ICE data shows that the benchmark Dutch front-month 'contract' at the TTF hub was 3.466 euros lower at 48.32 Euros per megawatt hour (MWh), which is around $16.40/mmBtu at 0755 GMT.
ICE data shows that the British April contract is down 6.7 pence to 121.4 pence per therm.
Trump and Marco Rubio, his Secretary of State, said that the end of 'the war in Iran' could be close. Washington indicated the possibility of both direct talks with the leadership of?Tehran and the winding down the conflict without a deal.
Around a fifth of the world's LNG passes through the Strait of Hormuz. However, shipping has essentially stopped since U.S. and Israeli began their strikes against Iran on February 28, 2016.
In a daily note, LSEG analyst Wayne Bryan stated that "Geopolitics is likely to'remain dominant in (price) drivers".
He said that he expects gas prices to continue falling as the geopolitical risks continue to diminish.
Analysts at Engie EnergyScan stated that recent high prices led to profit-taking.
In a daily comment, they stated that "given the recent high prices levels, some market players must have thought taking profits was a smart decision... even if 'buying back later' meant doing so."
EU Energy Commissioner Dan Jorgensen warned on Tuesday that the Iran War would cause "prolonged disruption" in energy markets. He also said he was considering revisiting measures taken during the energy crisis of 2022, when Russia cut gas deliveries.
Emergency policies? introduced in 2022 included a?EU-wide gas price cap, a?tax?on windfall profits of energy companies, and targets for curbing gas demand.
The benchmark contract on the European carbon markets was up by 1.07 euros at 73.58 euro per metric ton. (Reporting By Susanna Twidale; Editing by Subhranshu Sahu)
(source: Reuters)
