Amid expectations of a deal on the Strait of Hormuz: Gas Prices Rise in Europe
6 August 16:14
Wholesale gas prices in the United Kingdom and the Netherlands are edging up slightly on Thursday, August 6: the market is awaiting news on whether the proposed agreement—which could lead to the resumption of shipping through the Strait of Hormuz—will be implemented. This was reported by "Komersant Ukrainian", citing Reuters.
Front-month gas futures on the Dutch TTF hub rose 3.81% to €54.34 per megawatt-hour, while British August futures rose 4.46% to 133.75 pence.
Both contracts had hit intraday lows the previous day—their lowest levels since mid-July—following reports of a proposed agreement between Iran and Oman that would give Tehran control over the movement of ships entering the Persian Gulf through the Strait of Hormuz.
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According to Arne Loman Rasmussen of Global Risk Management, the market’s focus will now be on the White House’s reaction to the agreement, which reportedly involves charging fees for ship passage and could be perceived as a political defeat for U.S. President Donald Trump.
“Therefore, any agreement may prove to be just as fragile as the initial memorandum of understanding signed in June,” the analyst noted.
“Any resumption of exports would be positive news for European gas consumers,” wrote Daniel Haines of ANZ, pointing to low gas storage levels in the EU.
European storage facilities are less than 58% full, whereas a year ago this figure was about 12 percentage points higher, according to data from Gas Infrastructure Europe. This is the lowest level for this time of year since records began in 2011.
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