European Gas Prices Drop as Warm Weather Contains Heating Demand

European natural gas declined as mild weather expected during the next two weeks keeps a lid on heating demand, easing the impact of a historic energy crisis that’s already pushed consumer bills to record levels.

Benchmark futures fell as much as 6.8% to the lowest in more than a week. A slightly warmer forecast is delaying the use of the fuel from storage sites, creating a bigger buffer for the colder months. German stockpiles are more than 99% full, according to Gas Infrastructure Europe.

While prices have recently eased, they are still about three times higher than usual. European households are paying more than ever for their electricity and gas, even as governments have pledged more than 550 billion euros to shield consumers from the energy crisis, according to Helsinki-based energy consultancy VaasaETT Ltd.

Risks over existing gas supplies from Russia will continue through the coming months, with just one pipeline route open to the biggest European customers. That adds pressure on alternatives including nuclear power and wind generation, as well as liquefied natural gas. Next year, Europe’s gas shortage would be even wider.

Meanwhile, the US and Russia have discussed avoiding escalation of the war in Ukraine, although a settlement of the conflict wasn’t the aim of the talks, the Wall Street Journal reported, citing American and allied officials.

Dutch front-month gas futures, Europe’s benchmark, traded at €107 a megawatt-hour by 8:45 a.m. in Amsterdam.