European gas prices fell further on Thursday, continuing a recent sell-off, as unseasonably mild weather curbed demand and fresh supplies of the fuel headed to the region.
In thin holiday trading, gas futures linked to nF, Europe’s wholesale gas price, fell as much as 12 per cent to €84-90 per megawatt-hour as tankers carrying liquefied natural gas — originally destined for Asia — arrived in Europe.
These vessels were rerouted earlier this month by traders to cash in on record prices, which hit above €180 per megawatt-hour in the run-up to Christmas due to waning confidence in extra Russian supply.
Alex Froley, an LNG analyst at consultancy ICIS, said the gas carrier LNG
Rosenrot had left the US on a course to China but instead changed direction on Thursday and headed to the Netherlands.
“Mild weather and increased LNG flows have helped pull prices lower in the last week,” he said. “However if there are periods of cold weather in Europe or Asia in the remaining months of winter, the market could still turn back up again. ”
In the UK, the wholesale gas price dropped 10 percent to 210 pence per therm on Thursday, extending losses from last week’s record peak of 450 pence per therm to more than 50 percent.
In spite of the declines, European gas prices are still up by more than 350 percent this year, increasing energy bills for households and industry across the continent and adding to inflationary pressures.