European natural gas futures ended a three-day losing streak as traders weighed persistent supply risks against unseasonably warm weather. The benchmark contract posted a modest gain after declining nearly 8% over the previous three trading sessions. The broader energy market remains tense amid a significant U.S. military deployment in the Middle East, the ongoing Russia-Ukraine conflict, and reports from Ukraine of further attacks on its natural gas production facilities.
Recent declines in heating demand have allowed some nations, including Germany, to inject small amounts of surplus gas back into storage facilities. However, concerns persist regarding the upcoming refill season and the substantial volumes of liquefied natural gas imports required to replenish inventories.
Conflict in the Middle East threatens a key shipping route that handles approximately 20% of global LNG transit. Simultaneously, declining Ukrainian gas production may compel the country to increase imports, including purchases from the European Union.
Martijn Rats, a global commodities strategist at Morgan Stanley, stated, "Prices will find support throughout the summer. Europe must bid high enough to attract LNG cargoes."
As of 1:43 PM Amsterdam time, Europe's benchmark Dutch front-month gas futures rose 1.4% to 31.34 euros per megawatt-hour.
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