European natural gas prices halted their longest streak of gains since April as ample inventories offset risks to supply and a heat wave loosened its deadly grip.
Benchmark futures fell as much as 4.4% after gaining as much as 5.2% earlier. The record high temperatures in southern Europe that boosted demand in places such as Italy, which depends on gas for power generation, are starting to ease.
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While Europe emerged from last year’s energy crisis on relatively stable footing — its gas storage facilities are significantly fuller than usual for the time of year — disruptions to supply and spikes in demand are causing volatility. Traders are likely to keep a close eye on weather forecasts for August to gauge future consumption.
European storage sites reached 84% of capacity, and Germany already hit 86%, with at least two months remaining in the summer gas injection season.
“Further upside momentum has been dampened by continuously high underground gas storage levels in Europe,” Masanori Odaka, a senior analyst at Rystad Energy, said in an emailed note.
Still, Europe is increasingly competing with Asia for available liquefied natural gas. Several outages are due to curb supply in the coming weeks.
In the US, a portion of the Columbia Gas Transmission Pipeline shut after a fire in the vicinity, reducing feedgas supplies to the Cove Point LNG plant. Planned maintenance at major facilities in Norway is scheduled next month and, in Russia, Yamal LNG intends to shut one production train for works during three weeks in August.
Dutch front-month futures, Europe’s gas benchmark, fell 3.1% to €31.64 a megawatt-hour at 12:13 p.m. in Amsterdam. The UK equivalent also declined.
