Natural gas prices in Europe fell further as a spell of warm weather delayed the heating season, providing some respite to regional economies on the brink of recession.
The mild weather is likely to extend into this month, with forecasters Maxar Technologies LLC and Marex expecting no cold spells in November. It comes as a relief for consumers worried about the cost of heating and for governments keen to ensure healthy gas stockpiles for as long as possible.
Europe’s gas storage sites are nearly 95% full, providing a buffer for when the weather turns colder. Reserves in the biggest gas consumer, Germany, have risen to 99%, according to Gas Infrastructure Europe.
Dutch gas futures for December, Europe’s benchmark, settled at €116.193 per megawatt-hour. The UK equivalent contact slumped 7% to 279.69 pence a therm.
Risks still remain on the horizon as global supplies are tight. Despite the recent decline in prices, European gas is about four times higher than normal for this time of year. While supply concerns for this winter are easing, next year could be harder as refilling inventories is likely to be more challenging without the usual Russian supply.
Policy makers are weighing more measures to ensure Europe’s economies are protected from any further surge in energy costs. European Union energy ministers are targeting clinching a deal on another batch of proposals later this month.
