(Bloomberg) -- European natural gas prices fell, tracking Asian contracts lower, while Russia offered little clarity on volumes it plans to send to the continent next month. 

Gas giant Gazprom PJSC again opted not to book any extra pipeline space to ship the fuel westward through Ukraine during a monthly auction on Monday. In addition, Russia didn’t book any capacity for February either to deliver gas to Germany via the Mallnow station, where the Yamal-Europe pipeline terminates. 

Despite this supply uncertainty, benchmark gas futures in the Netherlands dropped as much as 7.8% on Monday, later paring some losses. Prices tracked spot rates in Asia lower. Traders are also watching weather forecasts, with above-normal temperatures expected across northern mainland Europe over the next two weeks. 

The continent is still grappling with its worst energy crisis in decades. Europe’s gas inventories are at the lowest on record for this time of year, while the heating season is far from over. 

While supplies have recovered somewhat from lows earlier this winter, with tankers sailing from the U.S, traders are on edge as flows from top fuel supplier Russia remain far below normal. Concerns of possible military action in Ukraine are also adding to uncertainty about Russian energy exports. 


Gas flows from Norway, which bottomed out over the weekend due to unplanned field outages, edged higher on Monday but are still below normal levels for this time of year. Some facilities are still working with reduced capacity, including the nation’s giant Troll field. 

EUROPE GAS OUTAGES: Gas Flow Cut at Troll Extended

Dutch front-month gas traded 5.4% lower at 82.27 euros per megawatt-hour by 1:26 p.m. in Amsterdam. The U.K. equivalent was down 4.4% to 199 pence a therm. 

Russia’s Supply

Last week, the International Energy Agency blamed the country for Europe’s supply crunch, saying Russia could boost deliveries to the continent by at least a third from current levels, but the nation is still keeping spot sales capped despite the high prices. 

Responding to the allegations, Russia said it’s ready to increase deliveries. But the nation needs long-term contracts, Deputy Prime Minister Alexander Novak said over the weekend.

“Auction results today will be particularly difficult to interpret,” said Tom Marzec-Manser, an analyst for European gas and LNG at ICIS. 

Last month, Gazprom booked about 21% of Mallnow’s capacity for January, yet there have been no flows so far this month. In December, the company used daily pipeline space allocations for that route after opting against booking capacity for the whole month.

“So it’s clear monthly bookings are no longer a good indicator of what might occur,” Marzec-Manser said.

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