Natural gas: Price downside limited – Commerzbank
Norman Liebke at Commerzbank argues that European gas prices may see only limited further declines despite a brief 8% drop on US–Iran diplomatic headlines.
Commerzbank's Norman Liebke asserts that the downward trend in European gas prices may be curtailed despite a recent 8% reduction following headlines of US-Iran diplomatic discussions. The Strait of Hormuz remains closed, limiting the amount of Qatari LNG entering the global market to merely 20% of pre-war capacity. EU gas storage levels are significantly below average, with Germany's storage at just under 57%, compared to the five-year average of almost 70%.
This shortage increases the likelihood of emergency purchases and potential price spikes. Although the US$ dropped briefly due to news of US President Trump's upcoming meeting with Iranian President Pezeshkian, the chances of further price declines are limited. Should the gap between Europe and Asia widen to EUR 6 per MWh, US LNG shipments might become more appealing, but the pricing difference seems unlikely to grow much larger to prevent the rerouting of LNG shipments.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
