Gas and Treasury yields fell after a third straight night of held fire between the U.S. and Iran eased energy disruption fears, though Europe’s low gas storage and tight LNG supply kept winter risks in focus.
UK and European natural gas prices fell sharply, while U.S. Treasury yields and oil also moved lower, after a pause in fighting between the U.S. and Iran reduced immediate fears of broader Middle East supply disruptions. UK gas dropped more than 7% to below 141 pence per therm and the benchmark Dutch TTF contract fell 6.2% to 59.70 euros per megawatt-hour by 0819 GMT, though TTF remained more than 46% higher on the month. In early U.S. trading, the 10-year Treasury yield fell more than 3 basis points to 4.6406%, the 2-year yield slipped to 4.3030%, and the 30-year yield declined to 5.1260%, while WTI crude dropped 5.34% to $84.55 and Brent fell 5.77% to $91.20 after nearing $100 a barrel last week. The de-escalation was described as a pause after 13 consecutive nights of U.S. strikes on Iran ended on Friday, with Tehran suspending retaliatory operations and the two sides holding fire for a third straight night. Despite the market relief, Europe’s gas outlook remained tight because of disrupted Persian Gulf LNG flows, Qatar export restrictions, stronger Asian demand, hot weather, and storage levels around 54%, below 65% a year earlier and the five-year seasonal average of 70%.