FX.co ★ European Gas Prices Fall on Hopes for Middle East Diplomacy

European natural gas prices eased to €102.5/MWh on Monday as intensified diplomatic efforts in the Middle East tempered fears of further escalation. Nonetheless, prices remained high against a backdrop of tight supply. US Secretary of State Marco Rubio noted that diplomatic channels with Iran were still open, and President Trump had yet to decide on any additional strikes. Iran’s supreme leader, in turn, warned both the US and Israel against carrying out further attacks. These developments coincided with a third consecutive day of talks between Iran and Qatar in Doha, aimed at bringing the conflict to an end. At the same time, LNG flows from the Persian Gulf remain heavily disrupted, with ongoing security risks in the Strait of Hormuz. As of November 1, Europe’s gas storage levels stood at 74.62%, a historically low level heading into the winter season. With temperatures dropping and withdrawals already underway in several countries, storage is likely to come under additional strain, maintaining significant upward pressure on prices.