Europe Gas Falls as Sluggish Demand Helps Preserve Winter Stocks
(Bloomberg) -- European natural gas prices declined as persistent low demand for the fuel helps to preserve the region’s inventories.
Benchmark futures fell as much as 4.9% on Monday, breaking two consecutive days of gains for the contract late last week.
The market is regaining confidence that Europe will end the winter with plentiful gas supplies as prices have stayed within a narrow range despite a severe cold snap. Overall demand is proving to be stubbornly subdued amid a grim macroeconomic picture, indicating that prospects for a substantial increase in industrial consumption remain unlikely in the near future.
Prices may drop further on Monday to below €40 per megawatt-hour “given the strong increase in wind generation and the upward revision of temperatures,” analysts at Engie SA’s EnergyScan wrote in a note.
The weather is set to get milder from London to Berlin toward the end of the week, according to forecaster Maxar Technologies Inc. That’s leaving the continent in a comfortable position for its second winter after Russia curbed pipeline flows. Withdrawals from storage sites have so far been marginal compared to previous years.
Dutch front-month futures, Europe’s gas benchmark, fell to € a megawatt-hour at 10:18 a.m. in Amsterdam.
©2023 Bloomberg L.P.
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