(Bloomberg) -- European natural gas prices halted their rally after Norway’s oil and gas unions agreed to end a strike and Germany took steps to ease its supply crunch.
Dutch front-month gas, the European benchmark, fell as much as 7.9% to 152 euros a megawatt-hour, ending five days of gains.
Europe is facing its biggest energy crisis in decades, with Russia -- the region’s primary supplier -- curbing shipments as tensions mount over the war in Ukraine and related sanctions. The prospect of crimped supplies from Norway had helped boost prices.
The Norwegian government proposed a compulsory wage board to resolve a dispute with unions over pay. “The parties have said that they will end the strike so that everyone can return to work as soon as possible,” the labor ministry said in a statement late Tuesday.
Industrial action had already shut three fields this week. A walkout at several projects on Saturday was set to eventually impact 56% of the country’s gas exports and cut supplies to the UK.
Separately, Germany’s cabinet on Tuesday rushed through legislation allowing it to rescue struggling energy companies, in an effort to limit the effects of a supply crunch. The measure, which goes to parliament this week, includes a mechanism to pass on part of the surging cost of gas to consumers, though that won’t be enacted immediately.
Germany is preparing for planned maintenance this month on the Nord Stream pipeline, the main gas conduit from Russia. Goldman Sachs Inc. said this week that it no longer sees a full restoration of flows as the most probable scenario following the works.
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