Gas prices in Europe are falling for the fifth day in a row, the biggest decline in more than a year, as liquefied natural gas (LNG) shipments from the US are expected to mitigate the energy crisis on the continent.
The Dutch benchmark is falling for a fifth day, falling as much as 8.3% in Amsterdam as additional liquefied natural gas vessels head for Europe, raising expectations that new supplies will help balance it. “tight” supply in the market.
Prices are falling after hitting record highs last week amid a sharp drop in gas flows from Russia.
Traders are, however, focused on whether Russia intends to commit capacity to the pipelines to transport more gas to Europe next month. In this context, they focus on the monthly capacity commitment auction that will take place today, which will give an indication of Gazprom PJSC’s plans for January.
Russia’s gas flows through the Mallnow station to Germany remained “frozen” on Tuesday, according to Gascade, as Russia refused to commit capacity in Monday’s auction.
In the Netherlands, next month’s gas contract was trading at 98 euros per megawatt hour at 09:50 am in Amsterdam. The UK contract at ICE Futures Europe is not traded today due to the holiday season.
Meanwhile, the number of LNG shipments from the US to European ports increased by 1/3 over the weekend. The continent is attracting more cargo as Asia’s largest buyers choose to use their stocks to meet winter needs, rather than supplying new quantities.
In addition, as part of the forecast for milder weather in much of mainland Europe next week, demand is expected to decline. However, the market remains on alert, as forecasts show that the temperature will fall much lower than normal for the season in the second week of January.
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