Natural gas prices in Europe edged lower as top supplier Russia tried to reassure buyers that they can keep paying for gas without breaching sanctions.
Benchmark futures dropped as much 3.2 per cent, before paring some of the losses. In a letter seen by Bloomberg, Gazprom told European clients that a new order published by the Kremlin on May 4th "clarifies the procedure" set out in the initial decree on ruble payments for the fuel.
It’s not yet clear if the new document will be enough to assuage the concerns of the European Union.
Poland and Bulgaria have already been cut off after they failed to meet Moscow’s new rubles-for-gas system. Other countries’ payment deadlines fall later this month.
Ample supplies of liquefied natural gas and warm weather are providing some bearish sentiments. Temperatures are seen at above to well-above normal levels across mainland Europe and the UK for the next two weeks, according to The Weather Co.
Gas for delivery next month fell 0.7 per cent to €101 per megawatt-hour as of 8.18am in Amsterdam. It rose for a second straight week on Friday.
Traders and policymakers will be closely watching Russian president Vladimir Putin’s Victory Day speech on Monday, when he may reveal the next steps for the war on Ukraine.
The date has become a touchstone of the Kremlin’s campaign to whip up public support for the invasion. Ahead of the speech, the Group of Seven most-industrialised countries pledged to ban imports of Russian oil, a move that also adds nervousness in the gas market. – Bloomberg