Article content

(Bloomberg) — European natural gas prices are poised for their biggest weekly loss in over two months as the region’s supply risks ease.   

Benchmark futures are set for a drop of around 6% since Monday, even as contracts fluctuated on Friday. That’s the biggest weekly decline since at least April, when traders were just starting to rebuild inventories ahead of next winter. 

Article content

Europe’s stockpiles are now 80% full, which is higher than usual for this time of the year. That, combined with stronger renewable generation and steady flows from Norway, is helping to assuage concerns over lower liquefied natural gas supplies due to higher demand elsewhere. 

While southeast Europe has battled severe heat waves, the northwest has seen cooler-than-usual weather so far this summer. That means there’s less demand in the north for gas to produce electricity for air conditioning. 

“Weak demand and high stocks could weigh further on the TTF in the rest of the injection season,” Energy Aspects Ltd. analysts wrote in a note this week. 

Still, prices have been volatile this year, with supply disruptions quickly sending prices higher. There are some concerns that remaining pipeline flows to the region from Russia could be cut off earlier than expected, and the Energy Aspects analysts said they expect gas prices to remain sensitive to news of global LNG outages. 

Dutch front-month futures, Europe’s gas benchmark, were little changed at €31.09 a megawatt-hour at 9:22 a.m. in Amsterdam. 

Share this article in your social network