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European gas extends losses amid rising supplies

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Natural gas prices in Europe started the year extending the sharp drop seen in the last month as rising flows eased concerns that supplies could lack during the winter, according to Bloomberg. 

Benchmark European gas for next month dropped as much as 6.2% to 66 euros a megawatt-hour on Monday, falling for the ninth day in the longest streak of losses in seven years. More liquefied natural gas is heading to Europe, while mild temperatures are set to reduce demand for fuel. 

European gas tumbled 30% last month after high volatility, with prices rising to record highs before Christmas amid declining Russian flows, then falling sharply as more U.S. tankers started to turn to Europe, bringing relief to the markets. 

Global liquefied natural gas exports jumped to a record last month as projects ramped-up output and utilities boosted imports to restock inventories, according to ship-tracking data compiled by Bloomberg. Qatar, the U.S. and Australia, the world’s top three exporters of the super-chilled fuel all boosted output in December compared to the previous year.

Gazprom PJSC increased exports to its main buyers in Europe, Turkey and China last year, yet flows remained below pre-Covid levels as the producer capped deliveries to Europe as a whole, amid the continent’s worst energy supply crunch in decades.

Gazprom’s exports have been closely scrutinized as tight supplies in Europe sent prices soaring to records. The Russian company has been sending only as much gas to EU clients as it’s obliged to under long-term contracts.