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European natural gas declined as recovering fuel flows from Norway eased supply concerns, with investors becoming more bearish again.
Benchmark Dutch futures fell as much as 6.2% with Norwegian supplies rising back to April levels early on Thursday, according to grid data. Shipments from the Nordic country, Europe’s top gas provider, have rebounded recently after seasonal works ended at major facilities. Coupled with higher-than-normal fuel stockpiles and relatively muted industrial demand, that’s adding to a sense of security in the market.
Adding to signs of bearishness, net short positions by investment funds in Dutch gas increased by the end of last week for the first time in over a month, according to data published Wednesday by the market operator, Intercontinental Exchange Inc. Back in early June, net short interest reached this year’s high, but later many investors had to close their positions after extended outages in Norway fueled sharp price spikes following months of relative calm.
Dutch front-month futures, Europe’s benchmark, traded 3.6% lower at €26.00 a megawatt-hour by 8:58 a.m. in Amsterdam. The UK equivalent fell 3.5%.
Still, traders remain on edge, continuing to react to news on unplanned supply curtailments, upticks in gas usage and global competition for the fuel. More seasonal works are scheduled in Norway next month.
In addition, unprecedented heat continues to blanket southern parts of the continent, threatening critical infrastructure and boosting energy needs for cooling. Worries about the impact of the heat wave on the market, together with concerns about the weather in August, caused prices to rise earlier this week.
