(Bloomberg) -- European natural gas retreated sharply after hitting €90 for the first time in almost four years, with some traders taking profits from the recent rally.
Benchmark Dutch futures slid as much as 5.3% in the later part of the session, erasing an earlier gain to the highest level since late 2022. Oil also fell, pushed down by an unconfirmed report that Qatar and Pakistan had issued a fresh proposal to revive negotiations to bring an end to the Iran war.
Prices are still more than double the levels before the conflict erupted as Europe’s low gas inventories and the continued loss of Middle Eastern supplies keep the region vulnerable heading into winter.
“We are seeing a bit of a correction after the €90 ceiling was reached,” said Rabobank senior energy strategist Florence Schmit. “But I think we have potential to go above that level again in the next week.”
Europe may have to pay up to attract enough fuel cargoes this winter, with liquefied natural gas demand from Asia setting the stage for more intense bidding wars when colder weather sets in. The region’s gas-storage sites are now about 75% full, the lowest for the season in records going back to 2009. The situation is even more acute in Germany, the region’s biggest economy, where levels are just over 61%.