Gas Futures Rebound After Trump Signals Iran Talks

European and British wholesale natural gas futures rose 1.6% on Tuesday, recovering from a more than 7% plunge on Monday. The initial market sell-off occurred after reports emerged that Donald Trump expressed openness to bilateral discussions with Iranian President Masoud Pezeshkian during the UN General Assembly in New York.

Traders initially drove prices down on hopes that direct U.S.-Iran talks could end the seven-month Middle East war and reduce transit risks across the Strait of Hormuz. Prices stabilized as market participants recognized that a diplomatic breakthrough is not guaranteed and physical supply through Persian Gulf choke points remains constrained.

Amid this volatility, the European Central Bank warned that wholesale gas price surges now impact retail inflation within one to three months across more than half of euro area economies. The bank attributed this accelerated pass-through to market liberalization efforts implemented after 2022.