Prices for gas in Europe fall after Trump delays strikes against Iran power plants
The European benchmark contract for gas fell sharply Monday after U.S. President Donald Trump announced he would delay strikes on Iranian energy infrastructure and power plants, saying that a deal could be reached with Iran "within five days or sooner".
Intercontinental Exchange data showed that the benchmark Dutch front-month contract at the TTF hub had fallen 4.14 euros to?55.12 per megawatt hour by 1322 GMT.
The price had been as high as 63.15 euro/MWh in the morning and dropped to a low intraday of 53.74 euro/MWh.
The British contract for the month of April is 12.72 pence lower at 138.38 p/therm. It traded between 132.79 and 159.47 pence/therm on Monday.
Susannah Streeter is the chief investment strategist of UK-based brokerage Wealth Club. She said, "Markets are on a wild ride as investors swing from pessimism into giddy enthusiasm about the future of the war against Iran."
She added that while clinging on to President Trump's statements is risky, the mood has shifted more positive for now.
Prices rose after?President Trump threatened on Saturday to "obliterate' Iran's nuclear power plants if the Strait of?Hormuz was not reopened in full within 48 hours. Iran warned that it could destroy Middle East energy and critical infrastructure.
Arne Lohmann-Rasmussen is the chief analyst of Global Risk Management. He said that the latest development does not change the forecast for a tighter market by 2027. This is because 17% of Qatar’s LNG production will be destroyed in the next 3 to 5 years.
He added that the contracts for the coming years are also higher.
Analysts from Rabobank raised their TTF forecast on Monday. They now expect 50 euros/MWh in 2026, and 42 euros/MWh in 2027. This is to reflect the prolonged closure of Strait of Hormuz and the multi-year reduction of Qatari LNG flow following strikes on its Ras Laffan Terminal.
Rabobank stated that "we also see the risk of further attacks in the Gulf causing lasting supply curtailments and posing a significant price?risk for our crude oil and natural gas views."
They forecast that the LNG supply for this year will remain at around 443 million tonnes, as U.S. add-ons cannot offset outages in the Middle East and?North Africa.
Gas Infrastructure Europe's data shows that EU gas storage facilities were 28.5% full at the end of last year compared to 33.8% around this time last.
The benchmark carbon contract in Europe was up 1.73 euros at 69.39 euro per metric ton. This reversed losses that had been made earlier in the day. Nora Buli reported from Oslo, and Susanna Twiddale from London. Janane Venkatraman edited the story.
(source: Reuters)
