European Gas Pares Early Gains

European natural gas prices climbed to as high as €43.4 before trimming gains to around €42.7 per MWh on Monday, amid signs of progress in US–Iran talks. The two countries agreed to establish communication channels to keep the Strait of Hormuz open and end hostilities in Lebanon. The latest developments came after talks got off to a tense start after Iranian media reported that Tehran had suspended discussions following Trump’s latest warning over Iran’s support for Hezbollah. European gas prices had fallen more than 13% last week after the US-Iran peace deal, though concerns remain over Europe’s ability to replenish gas inventories ahead of winter. EU gas storage facilities are currently 45.56% full, compared with 54.38% at the same time last year and about 14% below the five-year average, while net injections in June continue to lag seasonal norms. This comes as high temperatures are expected across Europe, which is likely to boost cooling demand.