(Bloomberg) -- European natural gas prices are set for a third weekly decline on mounting confidence that the region will have sufficient winter supplies.
Benchmark futures rebounded Friday after a dramatic slide a day earlier, but remain down 4% this week. Bloomberg reported Thursday that Kyiv is in talks about supplying Azeri gas to Europe as a transit deal with Moscow nears expiry.
A handful of European countries such as Slovakia and Austria still receive Russian gas via Ukraine. While an end to the transit agreement in its current form is almost inevitable, the region’s stockpiles are brimming and efforts to source alternative supplies continue, including from Azerbaijan.
Europe also receives deliveries of liquefied natural gas from around the world, though faces stiff competition for cargoes with Asia. Europe needs to attract 54% of the global flexible LNG supply pool this winter, down from 56% last winter, researcher BloombergNEF said this week.
“In the event of an extremely cold winter for both north Asia and northwest Europe, Europe is likely to fully deplete its storage and would need to fiercely compete for spot LNG,” BloombergNEF analyst Lujia Cao said in a report.
At average temperatures, Europe will exit the winter with storage still 40% full, above the five-year average, BNEF said in a separate report this week.
Dutch front-month futures, Europe’s gas benchmark, rose 3.19% to €34.14 a megawatt-hour as of 9:37 a.m. in Amsterdam.
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