European Gas Prices Slump as Risks Ease in Norway and Australia

European natural gas prices slumped on signs of easing supply risks in Norway and Australia.

(Bloomberg) — European natural gas prices slumped on signs of easing supply risks in Norway and Australia.

Benchmark futures fell as much as 6.1%, the most since Monday. Chevron Corp. and unions are close to a regulator-brokered deal to end strikes at liquefied natural gas export facilities in Australia as soon as Friday. 

Uncertainty over the strikes’ impact on LNG flows globally has weighed on the market for weeks, threatening to cause disruptions just ahead of Europe’s winter demand season. Prolonged maintenance in Norway, the continent’s biggest supplier, has been another source of nervousness. 

Norwegian flows are recovering as gas capacity at the giant Troll field gradually comes back online after repeated delays, according to network manager Gassco AS. 

The return of supplies takes place against a backdrop of healthy inventories and a relatively warm September for much of Europe, keeping demand muted. Storage sites in the region are about 94% full on average, much higher than usual for the time of year, data from Gas Infrastructure Europe show.

Germany, the region’s largest economy, is conducting a test Thursday to make sure it is prepared for the possibility of a gas shortage this winter. The nation has amassed healthy stockpile levels and expanded its ability to receive LNG since the height of Europe’s energy crisis in 2022. 

“Germany is much better prepared for this winter than last year,” said Klaus Mueller, president of the regulatory Federal Network Agency, in a statement. “We can certainly be optimistic, but it is still too early to sound the all-clear.”

The front-month gas contract on the Dutch hub fell 2.6% to €36.30 a megawatt-hour at 9:14 a.m. in Amsterdam. The UK equivalent contract also declined.

–With assistance from Iain Rogers.

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