European gas prices slump to 16-month low

As China’s stockpiles are full, natural gas prices have fallen to a 16-month low in Europe. This has forced buyers to ship supplies to Europe.

The European benchmark for futures in the Netherlands, the Dutch futures, dropped as much as 9% today. This brings the total decline from the beginning of the year down to 22%.

Mild weather in Europe has already left stocks relatively unaffected, and Chinese importers are trying to divert February and March shipments to Europe amid weak domestic prices and high inventories.

Many market participants are now less concerned that the country’s economic reopening will increase demand and draw cargoes from the West.

After a turbulent 2021, when oil prices soared to record levels and economies were hammered, gas markets are now calm.

The benchmark for Europe, the Dutch front-month gas futures have fallen 8.2pc, to EUR59.50 per megawatt-hour. This is their lowest level since September 2021.

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