European natural gas prices fell as warmer-than-usual temperatures curb demand for heating.
(Bloomberg) — European natural gas prices fell as warmer-than-usual temperatures curb demand for heating.
Mild weather has reduced pressure on the region’s gas inventories, with storage levels at roughly the same levels over the past three weeks at a time when countries normally tap their reserves.
That’s giving gas markets “a breather”, said Trevor Sikorski, head of natural gas, coal and carbon at Energy Aspects Ltd. in London.
“We will probably end the winter with healthy storage levels, making it less difficult to balance the market for the forward winter season,” he said.
While concerns over supply shortages are ebbing, there’s still a risk that lower European gas prices may reduce LNG shipments to the continent — which Europe has become more reliant on since Russia curbed pipeline flows last year.
Lower European hub prices have helped make LNG affordable in Asia again. It’s already more profitable for US sellers to send cargoes to Asia in February and March.
Dutch front-month futures gained as much as 3.5% earlier on Tuesday, before trading 1.8% lower at €73 a megawatt-hour by 10:28 a.m. in Amsterdam. The UK equivalent shed 2.5% to 179.05 pence a therm.
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