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European natural gas prices declined on Monday as muted demand helped to ease a tight market.
Warm weather across the region is expected to keep a lid on gas use for heating over the coming week, while a forecast for increased solar energy production in the UK, Germany and Spain may reduce the need for gas-fired power.
Dutch front-month gas, the European benchmark, fell as much as 3% to 80 euros a megawatt-hour, and traded at 82.45 euros as of 9:06 a.m. in Amsterdam. Friday marked the contract’s fifth weekly decline.
While Europe’s gas crisis is a “long way from over,” there have been signs over the past month of “at least a temporary easing in market stress,” analysts from Timera Energy said in a note.
A drop in Russian supplies in recent months and fears of further curtailments have prompted European energy companies to go hunting for new sources of gas to refill storage ahead of the winter. Increased imports of liquefied natural gas have helped to replenish stockpiles, though supply concerns persist as the war in Ukraine continues.
Russian deliveries via the Nord Stream pipeline to Germany — the biggest link to the European Union — are set to drop further on Monday, while flows via Ukraine will also remain limited, orders show. That comes as Europe braces for a drop in LNG supplies from the US after a fire halted production at a key plant in Texas.
Storage facilities in Germany — the EU’s biggest gas consumer — could be 80% full by October, according to Doug Waters, managing director of Uniper Energy Storage. That would mean “60% of winter gas demand is secured,” he said on Friday. “We are in a good position in terms of storage now.”
