European natural gas fell, reversing an earlier gain, as traders assessed whether a short-lived rebellion in Russia would have any impact on supply.
Benchmark futures settled 1.6% lower after advancing as much as 14% earlier. Gas has soared about 20% this month with prolonged production outages in Norway countering sluggish demand. Price fluctuations have surged in June, and the dramatic uprising in Russia over the weekend only roiled the market further.
While Europe has significantly reduced its dependence on Russian pipeline gas, Moscow remains a major supplier of liquefied natural gas. The continent also gets a large amount of LNG from other countries like the US, and the fuel overall has been crucial in ensuring supply during the energy crisis.
Other factors are also adding to market pressures. Shipments from Norway remain capped with a number of facilities undergoing maintenance. Seasonal work continues at major projects, including the Nyhamna processing plant and the Troll field.
Following the short revolt, Wagner group leader Yevgeny Prigozhin said he had no intention of ousting President Vladimir Putin’s government. A criminal investigation into Prigozhin’s mutiny remains open, Russian news wires reported. The market will be waiting to see if the turbulence continues and impacts supply of materials crucial for the global economy.
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“Overall, just like the other Russia-focused commodities, the impact for now is limited,” said Ole Sloth Hansen, head of commodities strategy at Saxo Bank A/S.
Dutch front-month gas, the European benchmark, closed at €31.98 a megawatt-hour. The UK equivalent contract fell 0.7%, while German power rose 0.4%.
--With assistance from Stephen Stapczynski, Anna Shiryaevskaya, Todd Gillespie and Priscila Azevedo Rocha.
