A Little Bit of Sunshine Sends European Gas Prices Tumbling

There’s beautiful weather across most of Europe, which won’t please natural gas sellers.

Mean temperatures in northwest Europe are set to be more than 20 degrees Celsius (68 Fahrenheit) this weekend, 5 degrees above the 10-year average. Same-day gas in the U.K., a European benchmark market, has fallen for eight sessions, its longest declining streak in almost a decade.

Adding to the short-term contract plunge is the lack of the Rough gas storage facility, which is offline for repairs until at least next year and so unable to soak up surplus supply. Market participants inject fuel into the site for use in winter during warmer months, including May.

Most traders are bearish front-month gas as additional liquefied natural gas sails to the region. Seven LNG cargoes are currently scheduled to arrive in northwest Europe through the first 10 days of June.

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