European Natural Gas Prices Decline Amid Stable Supply Outlook

In the European energy market, natural gas prices declined in early trading, influenced by expectations that gas supply will remain stable until the end of the year. The benchmark Dutch TTF fell by 2.2% to €45.46 per megawatt-hour. This drop followed the price reaching an annual peak of €49 per megawatt-hour recently.

Despite this decline, an increase in heating demand is anticipated due to colder weather forecasts for January, which could raise the gas storage withdrawal rates. As of Saturday, it was reported that the European Union's gas storage levels were 82.38% full, according to Gas Infrastructure Europe.

In response to concerns regarding potential supply shortages during the winter months, Europe has adjusted its gas inventory requirements. The mandatory gas inventory level has been raised to 50% by February 1, representing an increase from the previous target of 45% set for this year.

Analysts at ANZ Research emphasized the importance of robust liquefied natural gas (LNG) imports continuing until January. This strategy is seen as necessary to balance the expected absence of Russian gas supplies starting in January and to meet winter heating demand.