European wholesale gas prices fell to one-month lows on Tuesday as oil prices dropped further. President Donald Trump's plan to hold off on new strikes against Iran and fresh Russia-Ukraine talks eased market concerns.
European wholesale natural gas prices slipped to one-month lows on Tuesday, following a sell-off across the wider energy complex. The front-month Dutch TTF contract dropped 0.45% to 82 euros per megawatt-hour, its lowest level in a month.
The British National Balancing Point contract moved in step. It fell to a one-month low of 205 pence per therm, according to Investing.com.
Crude oil extends its slide
Gas followed another sell-off in crude benchmarks. Brent futures lost $2.39, or 2.58%, to $90.18 a barrel, while WTI futures dropped $2.11, or 2.43%, to $84.74.
Brent has now fallen roughly 23% from the six-month peak of $118 a barrel it touched on October 30. As a result, market focus has shifted from fears of supply shortages to the prospect of physical oversupply heading into the new year.
Trump pauses Iran strikes
The main driver was a shift in tone from Washington. Trump said on Monday that he plans to hold off on ordering new military offensives against Iran, after appeals from Middle Eastern countries that included a mediation effort involving Qatar's prime minister.
This took some of the risk premium out of energy markets. Even so, maritime attacks near the Strait of Hormuz keep supply concerns on the radar.
Russia and Ukraine return to talks
Eastern Europe added to the pressure on gas prices. Russian and Ukrainian officials were scheduled to meet on Tuesday for U.S.-brokered negotiations, their first direct talks since February.
The meeting followed Trump's suggestion last week that a broad peace agreement was possible to end the four-and-a-half-year conflict.
Source: Investing.com
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