European Gas Prices Drop as Traders Await News on French Strikes

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(Bloomberg) — European natural gas prices declined as market participants await updates on continued strikes in France, which have been disrupting the nation’s energy infrastructure.

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Benchmark contracts dropped as much as 4.2% — reversing Monday’s gains — with traders waiting for possible news from Elengy on labor action at three of its liquefied natural gas terminals. The most recent extension to strikes there was set to end Tuesday. The country’s fourth terminal, Dunkerque LNG, said it will cut deliveries of the fuel again on Tuesday.

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Europe’s official heating season will draw to a close this month after a mostly mild winter helped the region ride out an energy crunch that previously posed a risk of blackouts and squeezed supplies. Much of the continent will get hit by another cold spell next week, according to forecaster Maxar Technologies, though concerns about supplies have ebbed as storage levels remain well above historical averages.

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“With French LNG disruptions hopefully coming to an end this week, it is unlikely we will see any significant motion in either direction,” consultancy Alfa Energy said in a report on Monday, noting that gas prices have traded around the €40 mark.

Europe’s energy ministers are meeting in Brussels today to discuss a range of policy issues, including giving members the option to effectively ban shipments of Russian liquefied natural gas without having to implement further energy sanctions. 

Dutch front-month futures, Europe’s gas benchmark, were down 1.8% lower at €41.76 a megawatt-hour at 10:20 a.m. in Amsterdam. The UK equivalent contract was down by 1.3%.

—With assistance from Elena Mazneva.