Dutch and British gas contracts posted small gains on Thursday morning as optimism about a quick resumption of liquefied natural gas shipments through the Strait of Hormuz after the US-Iran ceasefire faded.
The benchmark Dutch front-month contract at the hub was up €1.03 at €46.33 per megawatt hour by 08:33 GMT, data from the Intercontinental Exchange showed.
The British contract for April was up 2.92p at 117.17p per therm. "We expect a slight upwards revision today after yesterday's bearishness," said LSEG analyst Saku Jussila.
Prices fell sharply on Wednesday on hopes that a ceasefire agreement between the US and its ally Israel and adversary Iran would jumpstart trapped liquefied natural gas shipments via the Strait of Hormuz.
However, no laden liquefied natural gas tankers have passed the strait so far, Jussila said.
"Optimism over the ceasefire faded after Tehran said several terms of the agreement had been breached," analysts at ING Research said in a note.
Shippers on Wednesday said they needed more clarity on the terms of the ceasefire before resuming transit through the Strait of Hormuz, as Iran said the waterway remained closed to vessels sailing without a permit.
At the same time, US President Donald Trump vowed to retain military assets in the Middle East until a peace deal with Iran is reached and warned of a major escalation in fighting if it failed to comply.
On a more positive note, the region's dominant liquefied natural gas exporter QatarEnergy was preparing to restart some of its liquefied natural gas production that was shutdown during the crisis, LSEG's Jussila said.
Israel's energy ministry also said it had instructed Energean to begin resuming operations at the Karish natural gas platform off Israel's Mediterranean coast following the ceasefire with Iran.
EU gas storage sites were last 28.8 per cent full, up from a low of 27.7 per cent reached at the end of the gas winter season on March 31, but below the 35 per cent seen at the same time last year, Gas Infrastructure Europe data showed.
(Reporting by Nora Buli; Editing by Ronojoy Mazumdar)
