European gas prices decline as mild weather curbs demand

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European natural gas prices declined as persistent warmer-than-normal winter weather reduces demand and eases stress of the region’s energy systems.

Benchmark futures fell as much as 5.2 percent, after opening higher on Tuesday. Unseasonably mild temperatures are set to remain across continental Europe next week, forecasts show.

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The weather has eased concerns about blackouts and rationing as stockpiles remain fuller than average, and there are less risks they will be depleted to dangerous levels over the winter. In fact, Europe has been able to add more gas into storage in the last few days amid a mix of curbed heating needs and typically lower consumption during the holiday season.

Germany is expected to produce near record wind power on Wednesday, according to a Bloomberg model, reducing the need of gas to produce electricity.

Dutch front-month gas futures were 2.6 percent lower at €75 ($79.2) a megawatt-hour as of 8:58 a.m. in Amsterdam. The UK equivalent contract fell 3.3 percent.

Prices had a record monthly decline in December, bringing relief to consumers and governments after a brutal year when they rose to record levels over the summer. Still, they’re much higher than the typical levels for the time of year, and any disruption in supplies could tighten the market again.

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