Investing.com – European natural gas prices ticked higher on Friday, as investors gauged the ongoing blockage of the Strait of Hormuz and stall peace talks between the U.S. and Iran.
By 06:37 ET (10:37 GMT), the Dutch front-month contract at the TTF hub had risen by 0.9% to 44.83 euros per megawatt hour, according to according to data from the Intercontinental Exchange.
President Donald Trump said on Thursday that a ceasefire between Israel and Lebanon would be extended for three weeks following a meeting with diplomats from both countries.
However, representatives from Hezbollah, the militant group fighting in Lebanon, were not at the talks, casting some doubt over the longevity of the truce. Firing between Israel and Hezbollah was also reported in the hours before Trump’s announcement.
Earlier this week, Trump also unveiled an indefinite ceasefire between the U.S. and Iran, but maintained an American blockade of Iranian ports.
Uncertainty has surrounded the fragile halt to hostilities. Tehran has responded to the U.S. blockade by moving to demonstrate its grip on the Strait of Hormuz by attacking and seizing ships in the vital waterway for roughly a fifth of the world’s oil and liquefied natural gas. The U.S. has also seized Iranian-flagged vessels and Trump has said he has ordered the Navy to “shoot and kill” Iranian boats attempting to lay mines in the strait.
European natural gas supply flows have been dented by the effective closure of the strait, along with attacks on crucial production facilities in the Persian Gulf, especially in major output hub Qatar. Against this backdrop, the TTF benchmark has been hovering well above pre-war levels for weeks.
More upward pressure on natural gas prices in Europe could come on Monday, when an anticipated fall in wind generation is expected to lead to increased demand for gas from power plants, Reuters reported, citing LSEG data. Elsewhere, a strike at an LNG facility in Australia could weigh on already tight global energy supplies.