European natural gas prices slumped as supplies from Norway soared due to the completion of major maintenance.
The benchmark contract fell as much as 7.5% after posting this year’s biggest weekly loss on Friday, a 22% drop. Tepid demand and rising storage levels have also helped to keep prices in check.
Works at the Nyhamna gas processing plant ended Saturday as planned. The outage lasted more than a month longer than originally scheduled, and delays have contributed to periods of intense market volatility in recent weeks.
Supplies of Norwegian gas are crucial for keeping the fragile market in balance as Europe rebuilds its energy security in the absence of most pipeline shipments from Russia. Liquefied natural gas flows have eased from previous months but continue to play a key role.
The extra supply comes as parts of southern Europe are experiencing unseasonably hot and dry weather. Temperatures across Italy and the Balkans are set to remain well above normal this week, with some of the highest readings in the region ranging from the upper 30s to mid 40s Celsius, according to forecaster Maxar Technologies Inc.
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Front-month gas in the Netherlands declined 1.7% to €25.51 a megawatt-hour by 1:12 p.m. in Amsterdam. The UK equivalent fell 1.3%.
“Near curve gas contracts are all benefiting from returning levels of gas flows from Norway, bolstering the UK’s short-term energy supply security,” Inspired Energy said in a note.
German power prices for August fell with gas, dropping 1.5% to €80.82 per megawatt-hour. Coal prices also traded lower.
--With assistance from Todd Gillespie.
