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Europe Gas Takes a Breather From Rally as Storage Fills Up


Natural gas in Europe eased, following a rally triggered by a scorching summer that has seen higher fuel demand and lower supplies from Russia.

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Natural gas in Europe eased, following a rally triggered by a scorching summer that has seen higher fuel demand and lower supplies from Russia. 

Benchmark futures fell as much as 2.6% in a thin start to trading. Storage sites across the region are 75% full, in line five-year average, providing some respite ahead of peak winter demand, as households and industries brace for further increases in their bills amid broader inflation. 

Still, concerns in energy markets abound. Hot and dry weather has sapped water levels on the Rhine River, a key artery to deliver everything from coal to diesel to land-locked nations. 

Germany, Europe’s largest economy, has taken one of the biggest hits from the energy crisis due to its traditionally heavy dependence on Russian supplies. The government has urged lower consumption, warned of rationing and this week slapped a levy on gas use. It’s also rushing to set up floating terminals to import liquefied natural gas.

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The country will have enough gas in storage to last only two and a half months should Russia cut off supply completely, even if the nation meets ambitious targets on stockpiling, according to Klaus Mueller, president of the Federal Network Agency, the country’s energy regulator. 

German utility Uniper SE, which was rescued with a government bailout last month, suffered a net loss of more than 12 billion euros ($12.2 billion) in the first half as the company struggles to fill gas-supply gaps left by Russia. It had to purchase the fuel from the market after Russia curbed deliveries. 

“Uniper has for months been playing a crucial role in stabilizing Germany’s gas supply — at the cost of billions in losses resulting from the sharp drop in gas deliveries from Russia,” Chief Executive Officer Klaus-Dieter Maubach said.

Front-month futures at the Dutch hub, the European benchmark, were 1.3% down at 223 euros a megawatt-hour by 8:24 a.m. in Amsterdam. They previously settled just shy of a record closing price.



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