European natural gas prices fell as warmer-than-usual temperatures curb demand for heating.
Mild weather has reduced pressure on the region’s gas inventories, with storage levels at roughly the same levels over the past three weeks at a time when countries normally tap their reserves.
That’s giving gas markets “a breather”, Trevor Sikorski, head of natural gas, coal and carbon at Energy Aspects Ltd in London, said.
“We will probably end the winter with healthy storage levels, making it less difficult to balance the market for the forward winter season, he said.
While concerns over supply shortages are ebbing, there’s still a risk that lower European gas prices may reduce LNG shipments to the continent, which Europe has become more reliant on since Russia curbed pipeline flows last year.
Lower European hub prices have helped make LNG affordable in Asia again. It’s already more profitable for US sellers to send cargoes to Asia in February and March.
Dutch front-month futures gained as much as 3.5 per cent earlier on Tuesday, before trading 1.8 per cent lower at €73 a megawatt-hour by mid-morning in Amsterdam. The UK equivalent shed 2.5 per cent to 179.05 pence a therm. – Bloomberg
