FX.co ★ European Gas Hovers Near 2-Week Highs

European natural gas prices hovered around €43.5 per MWh on the first day of July, near a more than two-week high, as traders monitored developments in US–Iran negotiations. Envoys of President Donald Trump arrived in Doha on Tuesday, but Qatari mediators downplayed expectations of a major breakthrough, noting that US officials were not scheduled to meet directly with their Iranian counterparts. EU gas prices declined 5.6% in June and were down 14.4% over the second quarter, following an interim agreement between the two sides that unwound most of the sharp gains posted earlier during a period of heightened tensions. Still, the downside has been partly limited by tight physical market conditions in Europe. Storage facilities are about 48% full, well below 56% at the same time last year and a five-year average of 61%. At the same time, an intense heatwave across the continent is supporting demand from power generators as they meet higher cooling needs.