European gas withdrawals as stable flows counter the risk of sanctions

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(Bloomberg) – Natural gas prices in Europe have fallen as stable supplies have countered concerns about new sanctions on top exporter Russia.

Benchmark futures settled down 2.3% on robust liquefied natural gas inflows to the continent, milder weather forecasts and strong wind generation in parts of Europe. Gas shipments from Russia via major pipeline routes are also broadly stable, keeping prices in check even with growing calls for new sanctions against Moscow.

“The losses reflect relief in the market that flows have not been halted and the winter trading period is firmly behind us,” consultancy DB Group Europe said in a note. Still, talk of new sanctions on Russia should add “some support” to prices, he said.

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The European Union said it was working on additional sanctions to punish Russia for what appear to be war crimes in Ukraine. French President Emmanuel Macron said in a radio interview that the bloc would discuss new measures, including possible restrictions on Russian oil and coal.

But opinions seem to be divided on gas imports. While German Defense Minister Christine Lambrecht said over the weekend that the bloc should talk about ending fuel purchases from Russia, Austria will not support moves targeting the sector as it would further harm the EU than in Moscow.

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Traders are watching the movements of shoppers closely, especially after Moscow launched ruble payments for fuel last week. While some are still evaluating the plan, Lithuania, a relatively small customer, has completely halted gas imports from Moscow in response to demand.

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Meanwhile, Germany is taking steps to secure its supplies after European units of Russia’s Gazprom PJSC came under pressure from customers and business partners. Gazprom Germania GmbH, owner of energy supplier Wingas GmbH and a gas storage company, will be placed under the supervision of the German energy regulator until September 30, Economy Minister Robert Habeck.

The move comes after the Russian gas giant quit the German subsidiary without seeking government approval, in violation of German law, he said.

warmer weather

First-month Dutch gas, the European benchmark, closed lower at 109.52 euros per megawatt-hour, after posting its first weekly gain in a month last week. The equivalent UK contract fell 5.2%.

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Bearish signals also came after Maxar forecast higher temperatures on the continent later this week following a spell of cold weather. This could reduce gas demand as the winter heating season is almost over.

Supply, meanwhile, remains robust, with LNG cargo arrivals in northwestern Europe expected to remain strong after a surge in imports in the first four days of the month, tracking data showed. ships on Bloomberg. Most shipments originated from the United States, followed by Qatar and Russia. Imports in March were close to January’s record.

NW EUROPE LNG TRACKER: Influx of American cargoes expected in April

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