European natural gas futures experienced a decline of over 1%, settling at €33.1 per megawatt-hour. This follows a more than 8% increase observed in the prior week. The downturn comes as concerns around the supply restrictions at Norway’s crucial Troll field ease, with impacts expected to be less severe than initially anticipated. Nonetheless, ongoing maintenance work across several Norwegian facilities will result in a temporary decrease in gas flows, maintaining a cautious market outlook.
As Europe gears up for the upcoming heating season, the focus intensifies on accumulating gas reserves. Current EU gas inventories are at 75.5%, in contrast to nearly 91% projected for 2024. Germany is notably trailing with reserves at 68.6%, whereas Italy and France have stockpiles at 87.4% and 83.8% respectively.
Meanwhile, geopolitical tensions continue to simmer, as the conflict in Ukraine persists with little hope for peace negotiations. Ukraine has sustained its attacks on Russian energy infrastructure, targeting the Baltic port of Ust-Luga over the weekend. In response, former US President Trump cited the potential for additional sanctions against Moscow, further intensifying the complex geopolitical landscape.
