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(Bloomberg) – European natural gas fluctuated as traders weighed the risk of a supply disruption from Russia against expectations of warmer weather and strong LNG shipments.
Next month’s Dutch futures erased earlier losses, after three sessions of declines. Higher than usual temperatures are expected across much of Western Europe next week. The region also imported huge amounts of liquefied natural gas due to low consumption in Asia.
Still, the market remains jittery over Russian President Vladimir Putin’s demand for ruble payments for gas supplied in April. Moscow has already cut off flows to Poland and Bulgaria for non-compliance with its new mechanism, and more regional suppliers will face payment delays in the coming weeks.
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The European Union plans to provide more information soon on what companies can and cannot do under EU sanctions rules to respond to Russia’s demands. EU Energy Commissioner Kadri Simson said on Monday the bloc needed to make it clear to companies that the Kremlin’s payment mechanism “constitutes a violation of sanctions and cannot be accepted.”
Read: EU aims to dispel ambiguity over Putin’s demand for rubles for gas
Barbara Pompili, France’s minister for ecological transition, said all member states have indicated they will stick to EU guidelines on gas payment. But Hungary, which relies heavily on Russian energy, has previously hinted that it is ready to pay in rubles to ensure continued deliveries.
Russia is the bloc’s biggest gas supplier, and bills for much of the supply delivered in April are due this month.
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Russian feeds
Observed Russian shipments transiting Ukraine and supplies via the Nord Stream pipeline were flat on Tuesday. Gas supply to and from Germany via Russia’s Yamal-Europe link remained at zero despite capacity reservations, according to network data.
The EU continues to push forward efforts to align alternative deliveries. The bloc will seek to step up cooperation with African countries to help replace Russian gas imports and cut dependence on Moscow by nearly two-thirds this year. This mainly includes LNG from West African countries.
“There is still a lot of uncertainty about how quickly Europe will phase out Russian gas supply,” Anton van Heesewijk, head of business strategy at Jera Global Markets, told the Flame conference on Tuesday. in Amsterdam. “Reducing supply before demand means higher prices.”
Benchmark futures for next month’s delivery rose 1.5% to 98.50 euros per megawatt hour at 9:42 a.m. Amsterdam. The UK equivalent was trading down 1%.
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