(Bloomberg) -- Natural gas prices in Europe edged lower as weather forecasts and currently stable supplies eased some concerns despite uncertainty over future exports from Russia.
Benchmark futures dropped as much as 5.1% with mild temperatures expected in the second half of this month and a flotilla of liquefied natural gas cargoes scheduled to arrive. Wind output is also high in parts of Europe.
The U.S., European Union and the Group of Seven are coordinating on a fresh round of sanctions on Moscow. The EU is considering a proposal for a mandatory phaseout on coal from Russia, but isn’t planning to sanction oil or gas for now, according to people familiar with the matter.
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Yet, gas flows from Russia, steady for the time being, remain in focus, especially after President Vladimir Putin last week initiated ruble payments for the fuel. Implications of that move are still being assessed by major European buyers, while a number of relatively small consumers have rejected the Russian demand, including Lithuania and Denmark.
Russia is prepared to cut gas supplies to Denmark if local buyer Orsted (OTC:DOGEF) AS doesn’t make its next payment in rubles, newspaper Borsen reported, citing Russia’s ambassador to the country. That sends another worrying signal to the EU -- which will need extra volumes of the fuel even when the summer season comes -- to replenish its gas storage facilities before the next winter.
Payments for Russian gas shipped in April are due late in the month or in May, depending on the contract.
Dutch front-month gas, the European benchmark, traded 1.4% lower at 107 euros a megawatt-hour by 8:43 a.m. in Amsterdam.
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