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European natural gas prices slid further as weather forecasts point to warmer and windier weather, signaling lower consumption of the fuel.
Benchmark futures hit a two-week low, before paring some losses, with temperatures expected to rise in the coming days after April started on a chilly note. Relatively stable storage levels — far above seasonal averages — suggest that heating demand is fading, while active fuel purchases to replenish gas inventories have yet to start.
In addition, power generation from renewables is set to gain momentum in parts of Europe, with the UK Met Office issuing wind warnings for this week. That could further reduce demand for gas.
Ample supplies and mostly mild weather helped keep a lid on prices over the winter. With Europe’s cold season now behind it, traders are awaiting signs of a revival in industrial demand, as well as increased competition from other markets. Liquefied natural gas purchases in Asia remain relatively muted, for now.
Still, risks for the rest of the summer season remain as Europe will be stockpiling gas for the next winter without its usual flows from Russia, while a potential rebound in China’s demand is unclear. Disruptions continue at some energy facilities in France amid wide-spread strikes, and supplies from Norway will decline soon given the upcoming maintenance season.
Dutch front-month gas futures, Europe’s benchmark, traded 1.2% lower at €42.60 a megawatt-hour by 9:22 a.m. in Amsterdam. The UK equivalent declined 1.1%.
