European natural gas prices dropped below €70 per megawatt-hour to a three-week low following reports that Iran could reopen the Strait of Hormuz if the US lifts its blockade of Iranian ports.
The October contract at the Dutch-based Title Transfer Facility (TTF), Europe's benchmark natural gas trading hub, closed at €73.25 per megawatt-hour on Monday.
Prices fell 5.6% from Monday's close to €69.15 as of 1.59 p.m. local time (1059 GMT) on Tuesday.
According to Japan's Kyodo News Agency, Iran conveyed to Washington that it was prepared to reopen the Strait of Hormuz within seven days if the US lifted its naval blockade and returned to diplomacy.
An unnamed Iranian government official said the proposal was conveyed to the US through mediators and included a proposal to resume negotiations aimed at reaching a lasting ceasefire between the two countries.
Meanwhile, weak LNG demand in Asia, particularly in China and Japan, also put downward pressure on prices.
- Storage levels remain below last year
According to data from Gas Infrastructure Europe (GIE), natural gas storage facilities in European Union countries were 69.94% full, well below last year's 81.85%.
Norway's natural gas exports remain constrained by maintenance work.
The country's gas export capacity is expected to decline by around 20% through the end of September due to planned maintenance ahead of the winter demand season in Europe.
Norway, Europe's largest natural gas producer, meets more than 30% of the continent's natural gas demand.
Analysts expect warmer weather across Europe over the next two weeks to reduce demand for natural gas for heating, supporting the decline in prices.
By Ebru Sengul Cevrioglu
Anadolu Agency
energy@aa.com.tr
