UK natural gas prices fell to below 140 pence per therm on Tuesday after hitting a four-month high in the previous session, as markets assessed reports of diplomatic efforts to ease tensions between the US and Iran.
Tehran said it had received a proposal from mediators for a 10-day ceasefire aimed at reviving the interim deal reached last month, offering some hope for a potential de-escalation of the conflict.
This comes as the US carried out a tenth consecutive day of strikes against Iran, while Tehran continued retaliatory attacks against neighboring countries.
The conflict has brought tanker traffic through the Strait of Hormuz to a standstill and delayed the anticipated recovery in Qatari LNG exports, intensifying competition among European and Asian buyers for cargoes.
This makes increasingly difficult for Europe to replenish reserves ahead of winter, with storage facilities currently less than 54% full, compared with 64% at the same time last year.