European gas prices drop as US production boost eases pressure of tighter Russian supplies

·1-min read
The Lichterfelde gas-fired power plant in Berlin, Germany, Wednesday, March 30, 2022. Shocking pictures from the Ukrainian town of Bucha and accusations of Russian war crimes are building pressure for more sanctions against Moscow, Monday, April 4, 2020. A key potential target: Russian oil and natural gas, and the $850 million that European importers pay for those supplies every day. But it's not so easy, given Europe's dependence on Russian energy.
The Lichterfelde gas-fired power plant in Berlin, Germany.Michael Sohn / AP
  • European gas prices dipped for the second consecutive day ahead of a potential US production boost.

  • Benchmark futures dropped as much as 4.6%, according to Bloomberg data.

  • Russia's gas shutoffs to Europe have pushed prices higher over recent months.

European natural gas prices fell for a second day on Thursday, to trade below the €200 mark.

Dutch TTF futures fell as much as 4.6%, though pared some losses to trade about 1.45% lower.

Prices slipped as a major gas export hub in Texas is slated to reopen in October at almost full capacity after shuttering earlier this year. The Freeport liquefied natural gas facility had signaled it would reopen, but its most recent update shows supplies will return much more rapidly than anticipated.

The US plant restarting comes at the right time as Europe continues to face worsening natural gas pressures amid Russia's tightening of supplies. The energy crunch is reverberating through the European economy, keeping inflation red-hot and pushing governments to call for lower consumption.

Last week, Russia's Gazprom slashed Nord Stream 1 gas flows to Germany to 20%, citing equipment issues. Then, on Monday, Russia halted flows to Latvia, which also pushed European gas prices higher.

Additional natural gas supplies from the US could help ease prices further, even as the US already is sending more gas by boat to the continent than Russia is by pipeline.

Ahead of winter, Europe is on track to meet its storage goals of 80% capacity by November 1, though nations are paying 10 times the historical average, to the tune of $51 billion, according to Reuters.

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