Europe’s benchmark natural gas prices extended last week’s losses to drop by nearly 3% midday in Europe on Monday after a prolonged maintenance period on a key Norwegian gas supply route ended this weekend.
The front-month futures at the TTF hub, the benchmark for Europe’s gas trading, traded at $28.32 (25.22 euros) per megawatt-hour (MWh) as of 11:57 a.m. GMT on Monday, down by 2.84% on the day.
Last week, Europe’s gas prices posted their biggest weekly loss for this year, 22%, as Norwegian gas supply increased following the end of regular maintenance at the giant Troll gas field and several other gas processing plants in Norway.
Over the past month, maintenance at some facilities had to be extended beyond the original end date, which caused volatility in the gas market due to uncertainty about the Norwegian supply.
But the maintenance works at the Nyhamna gas processing plant ended on Saturday as planned after work took over a month more than originally thought.
As a result, Norway’s gas exports rose on Monday by 60 million cubic meters a day (mcm/d) at 318 mcm/d, according to Refinitiv Eikon data cited by Reuters.
Norway is now Europe’s single largest gas supplier after Russia cut off pipeline supply to most of its EU customers after the invasion of Ukraine.
The return to regular Norwegian gas supply to the UK and mainland Europe has calmed the gas futures market in recent days, despite the prolonged heatwave in southern and central Europe with temperatures above normal levels and reaching record highs.
Despite higher demand for cooling, natural gas demand in Europe continues to be subdued, also due to weaker demand for industrial activities.
Stockpiles are also elevated, giving further confidence to governments ahead of the winter. As of July 15, gas storage sites across the EU were 80% full, according to data by Gas Infrastructure Europe.
By Charles Kennedy for Oilprice.com