(Bloomberg) — European natural gas prices rose as timelines for some key EU measures to contain the energy crisis were pushed back further.
Benchmark futures rose as much as 5%, but are still headed for the biggest monthly decline this year. European Union energy ministers on Tuesday set another new deadline of Nov. 24 to clinch a deal on the latest batch of proposals to tame energy prices. Steps like a market benchmark won’t kick in until the spring, and plans for price caps are caught up in diplomatic discussions.
A wave of unseasonal heat this month has given the region some breathing room. It’s delayed the heating season, which together with continued high imports of liquefied natural gas has allowed even more fuel to be injected into fuller-than-usual storage sites. But the weather will inevitably turn colder, and a strong wintry spell could quickly drain inventories.
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“We are still hostage to the risks of a very tough winter,” Matthew Baldwin, deputy director general of the European Commission’s energy department, said at an industry conference in London this week. Europe is “still hostage to interruptions in LNG supply,” he said.
Dutch front-month gas, the European benchmark, was 4% higher at €103.81 a megawatt-hour as of 9:02 am in Amsterdam. It’s down 45% this month.
Prices remain about three times higher than normal for this time of year, still putting immense pressure on the economy and inflation. BASF SE said its gas bill in Europe rose by around €2.2 billion in the first nine months of this year, while Uniper SE warned of a €3.2 billion loss.
The EU energy ministers on Tuesday reached a general agreement to pursue joint gas purchases. But trickier measures that could have a greater market impact are still stuck in discussions.
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—With assistance from Elena Mazneva.