European natural gas declined on Tuesday as weather forecasts indicate an end to the ongoing icy spell next week while stockpiles remain higher than necessary.
Benchmark futures declined by 11%, thereby extending Monday’s losses, while Dutch front-month gas fell by 8.3% to €60.50 a megawatt-hour, resulting in a 21% decline since the start of the month.
“Gas markets remained relatively stable in the face of the colder weather,” analysts at Alfa Energy commented on the ongoing situation. “With weather meant to return to mild in early February, not much price volatility is expected till then.”
As a result of consistent LNG flows and well-stocked inventories, previous concerns about insufficient gas supplies ahead of the winter months have subsided. Norway, which remains Europe’s top gas supplier, found itself in recovery on Tuesday after dealing with supply cuts caused by planned and unplanned outages. Still, shipments from the nation remain below maximum capacity.
Forecaster Maxar Technologies Inc. has reported that temperatures in northwest Europe are set to warm notably going into the first week of February, lowering gas reliance as a result.