(Bloomberg) -- European natural gas edged lower amid mild weather and an abundance of supply arriving by tankers from global suppliers.

Dutch next-month futures fell as much as 3.1% for a fourth consecutive daily decline before paring some of those losses. Higher-than-usual temperatures are expected across most of western Europe. The region has also imported huge amounts of liquefied natural gas on the back of muted consumption in Asia. 

Still, traders remain on edge due to Russian President Vladimir Putin’s request for ruble payments for gas supplied in April. Moscow has already cut supplies to Poland and Bulgaria for failing to comply with its new mechanism, and more regional suppliers will face payment deadlines in coming weeks.

Italian Prime Minister Mario Draghi said that setting up a ruble-denominated account to pay for Russian gas would be a breach of contract. 

“It’s very important that the EU Commission gives a clear legal opinion if payment in rubles is a violation of sanctions,” Draghi said at a press conference Monday. He urged clearer direction from the European Union as Italy is due to make payments in about two weeks, adding that the country will adhere to the EU’s guidance.

Observed Russian flows transiting Ukraine and supplies via the Nord Stream pipeline were stable on Tuesday. Gas supplies to and from Germany via Russia’s Yamal-Europe link remained at zero despite capacity bookings, grid data show.

Still, the EU is pushing ahead with efforts to line up alternative deliveries. The bloc will seek to step up cooperation with African countries to help replace imports of Russian gas and reduce dependence on Moscow by almost two-thirds this year. That mainly includes LNG from western African nations. 

Benchmark futures for next-month delivery declined 1.1% at 96 euros per megawatt-hour by 8:26 a.m. in Amsterdam. 

 

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