Investing.com – European Natural gas contracts slumped on Monday after as a breakthrough peace agreement between Iran and the U.S. electrified investor sentiment across global cash markets and falling crude prices eased inflationary pressures.
The benchmark fell to 33.36 per megawatt hour, while the fell 6% to 106.17 pence per therm. Both traded at over one-month lows.
The fall follows a Sunday announcement from U.S. President Donald Trump, who confirmed that a brokered deal will immediately cease hostilities and reopen the economically vital Strait of Hormuz.
Corroborating the breakthrough, Iranian Deputy Foreign Minister Gharibabadi announced on state television that the accord is finalized, with a formal signing slated for this Friday.
EU gas storage sties were last 44.34% full, compared to 53.02% at the same time last year, according to Reuters.
While the geopolitical relief valve has pulled the plug on prompt prices, underlying market fundamentals remain structurally tight. Industrial gas demand across the EU has shown signs of a tentative recovery, yet the lower year-on-year storage levels mean Europe faces a much steeper uphill climb to meet its pre-winter targets.