Natural gas prices fell for a third day as the European Union pushes ahead with its market intervention to ease the worst energy crisis in decades, according to Bloomberg.
Benchmark prices dropped as much as 4.8% to a seven-week low. European Commission President Ursula von der Leyen will present a slimmer version of her five-point plan on Wednesday, with the EU seeking to curb power consumption and provide liquidity in a attempt to prevent the crisis from engulfing the broader economy.
While the policy measures are being worked out, gas continues to be pumped into inventories with the official start of the heating season just over two weeks away. European storage sites are about 84% full, slightly above the five-year average, and at 88% in Germany, according to Gas Infrastructure Europe. Some injections usually continue into October before heating demand starts soaking up stockpiles.
Russia gas supply cuts have slammed Europe through the summer with industries producing everything from metals to fertilizers forced to reduce output and bringing the economy to the brink of recession. Inflation has surged to multiyear highs and the cost of living crisis has deepened. It has compelled governments to step in to help ease the pain.
As part of its plan, the EU aims to cut power demand and cap excessive revenue of companies producing electricity from sources other than gas. It would be done through a limit on the price of power from renewables, lignite or nuclear.
Front-month Dutch gas futures were 4.3% lower at 182.33 euros per megawatt-hour as 9:37 a.m. in Amsterdam. Prices fell 14% in the previous two sessions. The UK equivalent contract dropped as much as 3% on Tuesday