Europe Gas Falls as EU Ministers Back Measures to Contain Crisis

Natural gas prices in Europe fell as energy ministers backed measures to contain a crisis that’s threatening the region’s economy.

Dutch gas for November delivery dropped as much as 4%, extending Thursday’s decline. Ministers gathering for a second emergency meeting this month supported an initial package, including a power-demand reduction goal and a profit grab from energy companies. A cap on gas prices could be discussed, but there’s unlikely to be a decision.

Nations from Germany to France are urging citizens to cut energy use --  a difficult request during the winter heating season. Authorities are warning that failing to do so would result in shortages and even rationing. The European Union has already agreed on a voluntary target to cut gas consumption by 15%, but more action is needed. Berlin also announced Thursday that it would put a lid on local gas prices. 

The efforts come amid a worsening energy conflict between Europe and Russia following blasts in the Nord Stream pipeline system that Western politicians are saying was deliberate and sabotage. In response, Europe is bolstering security at key energy assets. TotalEnergies SE said it spotted an aerial drone close to an oil field in the Danish North Sea, and is increasing vigilance in the area.

The Kremlin has said claims of Russian involvement are “absurd.”

“Europe is facing energy blackmail by Russia, and global demand for gas is higher than supply,” Energy Commissioner Kadri Simson said ahead of the ministers meeting. “We need to work along the whole chain to tackle the challenge.”

Dutch gas for November delivery, a benchmark for Europe, was 4.8% lower at 193.99 euros a megawatt-hour as of 11:39 a.m. in Amsterdam. Prices are heading for the first monthly decline since May. The UK equivalent dropped 6.1%. 

Nord Stream AG plans to start assessing the damage to the pipelines “as soon as it receives necessary official permits,” the operator said in a statement. Access to the area may be allowed only after the gas leakage halts.  

Still, storage sites in Europe are filling steadily amid ample LNG supplies, helping ease some nerves as the heating season officially starts over the weekend. Reservoirs are about 88% full -- higher than usual for this time of year. 

--With assistance from Ewa Krukowska.