Benchmark Dutch front-month futures fell as much as 21%, partly reversing last week’s jump of almost 40%. German power prices also slumped, after earlier climbing to a record. In Germany, gas stores are filling up fast and are expected to meet an October target of 85% full already next month, Economy Minister Robert Habeck said in a statement on Sunday.
Monday’s plunge in prices is some relief after a furious rally with futures still trading almost six times higher than a year ago. The region is on the brink of a recession, with inflation at the highest in decades in some countries. Governments are also putting in place measures to ease the burden, setting aside some 280 billion euros ($278 billion) in relief packages.
The fundamental picture still looks bleak, and even with full storage sites, Germany risks not being able to go through the winter if Russia halts flows to the region’s largest economy. The Czech Republic, which holds the European Union’s rotating presidency, will call an extraordinary meeting of energy ministers to discuss bloc-wide solutions.
With more gas in storage, European nations are slightly better placed to face a further supply cut as Russia’s Gazprom PJSC starts maintenance on Nord Stream on Wednesday. Lower temperatures seen across Eastern Europe, and parts of the Iberian peninsular next week will also help nations to reserve more gas as less energy is seen to be needed for cooling.
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