European Natural Gas Prices Fall as Mild Winter Crimps Demand

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European Natural Gas Prices Fall as Mild Winter Crimps Demand
Credit: © Reuters

(Bloomberg) -- European natural gas prices fell as warmer-than-usual temperatures curb demand for heating.

Benchmark futures declined as much as 3.1% on Tuesday. Gas inventory levels at storage facilities across the continent have remained at roughly the same level over the past three weeks at a time when countries normally tap their reserves.

European gas costs have almost halved over the past month, prompting concern that liquefied natural gas could head toward other destinations.

LNG imports have been critical in replacing some gas supplies amid reduced flows from Russia, but lower prices has made the fuel 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 traded 1% lower at €73.50 a megawatt-hour by 8:20 a.m. in Amsterdam.

©2023 Bloomberg L.P.

© Bloomberg. Gas pipes at the Radeland 2 compressor station, operated by Gascade Gastransport GmbH, on the European Gas Pipeline Link (EUGAL) in Radeland, Germany, on Monday, Jan. 9 2023. Energy costs have been a key driver of inflation, and unexpectedly low demand is easing the burden on consumers and sparking optimism among European authorities.

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