EUROPEAN GAS PRICES DECLINE
BLOOMBERG - Jan 20, 2023 - European natural gas is set for its longest run of weekly losses in almost three years, with mild weather forecast to return later this month, offsetting supply concerns.
Benchmark futures fluctuated between small gains and losses early Friday. For the week, they were poised for a sixth consecutive decline, the longest since February 2020.
A cold front, moving through the British Isles and parts of continental Europe, is expected to ease by the end of the month with temperatures in the northwest rising back above normal, forecaster Maxar Technologies Inc. said in a report.
That’s keeping prices in check even as supplies from Norway remain capped amid outages. Exports from Russia sent via Ukraine have also dropped from earlier this week, and are expected to inch even lower on Friday. Some analysts suggest that might be due to curbed buying.
Gas prices have dropped significantly over the past month due to the mild winter, easing a historic energy crisis that has fueled inflation. Storage levels remain well above seasonal norms — even after recent withdrawals amid the cold snap — and the region continues to pull in imports of liquefied natural gas.
Even so, traders are still closely watching supply and competition with Asia for LNG. The maintenance-related drop from Norway — the region’s top supplier — and outages at LNG terminals elsewhere highlight the market’s tightness.
Dutch front-month futures, Europe’s gas benchmark, were 2.8% lower at €59 a megawatt-hour by 8:29 a.m. in Amsterdam.
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