(Bloomberg) — European natural gas prices declined after Israeli strikes against targets in Iran avoided oil, nuclear and civilian infrastructure, signaling that supply risks linked to the Middle East conflict remain contained for now.
Benchmark futures fell as much as 4.3% on Monday, after posting the biggest weekly gain since August on Friday. Oil contracts also slumped.
While the market had been bracing for an attack with bigger repercussions, Israel’s retaliation against Iran over the weekend was more restrained than many expected. A key risk had been that an escalation would disrupt shipments through the Strait of Hormuz, an important waterway for liquefied natural gas and oil.
While Europe’s fuel inventories are more than 95% full, its gas market has been on alert for supply disruptions as it relies on continuous flows from around the world. Prices have been volatile in recent weeks as traders awaited Israel’s response to a missile barrage at the start of the month, and unexpected supply outages from Norway to the US have added to risks.
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On Monday, as some of those concerns eased, weather forecasts pointed to mild conditions for the next two weeks across northwest Europe. That’s helping to push prices lower as it signals less fuel will be needed for heating.
Dutch front-month futures, Europe’s gas benchmark, fell 2.1% to €42.62 a megawatt-hour at 8:31 a.m. in Amsterdam.
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Publish date : 2024-10-28 01:56:00
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