European gas headed for biggest gain since September

European gas headed for biggest gain since September

European gas is heading for the biggest monthly gain since September as Russia s supply cuts put pressure on companies and forcing governments to confront the prospect of major shortages.

On Thursday, Benchmark futures rose by as much as 4%, taking the month's increase to more than 50%. The cuts earlier this month have tightened the market, overshadowing reduced summer demand and strong imports of liquefied natural gas. Countries are prioritizing refilling of storages in time for winter and urging consumers to reduce demand.

Growth is hampered by the cuts, and the operations of companies are hit with the effects of the cuts. The German energy giant Uniper SE is talking about a possible bailout from the government as Gazprom PJSC has only delivered 40% of contracted volumes since mid-June, forcing the utility to buy more expensive fuel in the spot market.

If Russia cuts supplies in response to the war in Ukraine, the European Union might have to take additional measures to destroy demand. A planned maintenance shutdown at the Nord Stream pipeline - the biggest link to the EU - will stop flows for about 10 days next month, which many fear won't resume.

The drop in demand from industries increased this month, according to BloombergNEF. It will help in freeing up gas to be sent into storage sites, but it also exacerbates an economic slowdown in the region.

Dutch gas for August was 2.3% higher than the European benchmark of 143.42 euros per megawatt hour as of 9: 14 a.m. in Amsterdam. The equivalent of the UK gained 2.3%.

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