FX.co ★ EU Natural Gas Pulls Back Toward 7-Month Low

European natural gas prices have decreased to under €34 per megawatt-hour in April, reaching their lowest level in seven months. This decline is largely due to reduced purchasing demand from significant energy consumers in Asia, which has heightened the effect of increased supply to primary European transfer hubs. The influx of liquefied natural gas (LNG) into Dutch hubs has exceeded seasonal averages, suggesting an abundant supply from leading producers to Europe. This situation has enabled EU countries to replenish their reserves following the winter months, consequently shifting futures prices back to a typical contango market structure. This increased availability of LNG in Europe correlates with diminished demand from Asia. China's imports have dropped by over 20% compared to the previous month, a consequence of economic challenges stemming from its trade conflict with the United States. Additionally, LNG imports in India have also declined due to a significant drop in thermal coal prices, which are at a four-year low, prompting power consumers to consider alternative energy sources.