European gas slumps to 16-month low on strong supply outlook
Natural gas prices in Europe dropped to the lowest level since September 2021 as the supply outlook got a boost with full stockpiles in China forcing buyers to send LNG cargoes to the continent, Bloomberg reports.
Benchmark futures fell as much as 15% on Monday, taking the decline so far this year to 27%. Chinese importers are trying to divert February and March shipments to Europe amid weak prices at home and high inventories. That’s easing concerns that the reopening of China’s economy will boost demand and pull cargoes away from the west.
Still, some are warning that the crisis that was triggered by Russia’s deep supply cuts following the invasion of Ukraine is far from over. Europe has been “lucky” with the weather, and supply remains exposed to geopolitical events, Iberdrola SA’s Chairman Ignacio Sanchez Galan said. Gas prices may have dropped, but are still almost double their five-year average for the time of year.
