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Natural gas prices in Europe fell for a second day as buyers looked for ways to keep paying for Russian gas and still avoid busting European Union sanctions.
Benchmark futures slipped as much as 3.9%. Austria’s OMV AG said it expects Russian flows into Europe will continue, a day after a government minister said the European Commission has told Austria that its payments for supply fully conform with the law. Hungary said it is sending euros to Gazprombank JSC, which it is then allowing to be converted into the local currency in line with Moscow’s new mechanism.
European gas buyers are looking for workarounds to meet Moscow’s demand for ruble payments and be compliant with sanctions at the same time. The payments spat escalated sharply on Wednesday after Moscow cut off supplies to Poland and Bulgaria for failing to comply with its new system.
Russia has said that flows to other buyers who don’t pay in rubles could also stop. Companies in the European Union that open an account in rubles to pay for Russian gas would violate sanctions imposed by the bloc, according to EU officials.
Gas futures for June delivery declined 2.9% to 97 euros per megawatt-hour as of 8:47 a.m. in Amsterdam, after closing 7.2% lower on Thursday. The contract has dropped more than 20% this month.
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Prices are also easing as demand in Europe could weaken next week with Maxar forecasting temperatures rising to normal levels across Spain, France, Germany, Italy and Scandinavia. The end of the winter heating period has also crimped consumption.
Meanwhile, orders for gas flowing from Germany to Poland via the Yamal-Europe pipeline was stable on Friday after an increase earlier in the week as Warsaw looked for supplies following the halt from Russia. Russian supplies to Germany via the Nord Stream link are also expected to be steady, grid data show.
