Gas prices fall by more than seven percent. Markets bet on breakthrough between US and Iran

The wholesale price of gas for the European market is falling sharply today on hopes of a peace deal between the United States and Iran. At around 10:30 CEST, the benchmark front-month gas futures contract at the Title Transfer Facility (TTF), the virtual trading hub in the Netherlands, was down more than seven percent, falling below 46 euros (roughly CZK 1110) per megawatt-hour (MWh).

US President Donald Trump called off the planned strikes on Iran on Thursday evening, citing progress in talks. According to Trump, a deal that would reopen the Strait of Hormuz could be signed in Europe over the weekend. Tehran, however, said it had not yet made a final decision on a deal with the US and described reports of an imminent signing as speculation.

"Despite a number of false promises, financial markets appear to be reacting as if a deal is on the way. Bond and share prices are rising, while oil and gas prices are falling," analysts at Peel Hunt said, according to Reuters.

The conflict in the Middle East began in late February with US-Israeli attacks on Iran. The war has crippled shipping through the strategically important Strait of Hormuz, which normally carries about a fifth of global liquefied natural gas (LNG) supplies.

"The market will continue to closely monitor developments over the weekend and next week. If a deal is signed, we expect gas futures prices to fall further," said Saku Jussila, an analyst at LSEG.