European gas, power slide as mild weather eases supply concerns

[LONDON] European natural gas and electricity fell for a third day as worries over supply waned amid forecasts for milder weather.

Japan is ready to divert some liquefied natural gas cargoes to Europe if flows of Russian gas are disrupted, according to broadcaster NHK.

The continent also continues to draw cargoes from the US.

The additional supply is helping ease fears of gas shortages, and is pushing power prices lower with the end of the winter heating season in sight.

Warmer-than-normal weather has helped Europe avoid the worst impact of the energy crisis.

Temperatures in mainland Europe are expected to be above average next week, according to forecaster Maxar.

That would help temper demand. But traders continue to scrutinise every move in the standoff between the West and Russia over Ukraine for any potential impact on supply.

Moscow this week cast doubt on French President Emmanuel Macron's comment that he'd received assurances from President Vladimir Putin that Russia wouldn't escalate tensions with its neighbouring country. Putin has denied he plans to attack Ukraine.

Russian gas entering Slovakia through a key route crossing Ukraine has fluctuated in recent days. Flows fell on Wednesday (Feb 9) for a second day, after rising sharply on Monday.

The major Yamal-Europe pipeline has also not sent any supplies into Germany for seven weeks.

Mild Winter The mild winter so far means requests for Russian gas from European clients have been low, Russian Permanent Representative to the EU Vladimir Chizhov told the Sputnik news service.

Supplies can be increased if clients demand it, he said. Dutch front month gas futures fell as much as 5.6 per cent, and were 1.9 per cent lower at 75.80 euros (S$116) a MW-hour as of 10.03 am in Amsterdam.

The equivalent contract in the UK declined as much as 1.6 per cent to 183 pence per therm.

Weaker gas, warm weather and strong wind output have helped push down electricity prices, with German power for next month sliding 2.6 per cent to 164.50 euros per MW-hour. Carbon permits gained 0.5 per cent, reversing an earlier decline of as much as 1.3 per cent. BLOOMBERG