(Bloomberg) -- European natural gas tumbled as a mild weather forecast for October overshadowed supply risks.

Day-ahead prices dropped more than 10%, while benchmark futures lost 6% on Monday, followed lower by key power contracts. 

Temperatures are forecast to be well above seasonal norms in northwest Europe through most of the month. Gas continues to be injected at storage sites, which are now more than 95% full. That’s helping to keep prices in check — along with muted industrial demand — despite tighter supplies.

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The most traded futures are falling “amid continuously warm autumn weather, high renewable production and filled storages,” analysts at trader Energi Danmark said in a note. “Temperatures in Germany are expected 3 degrees above average this week, limiting demand significantly.”

Meanwhile, supplies from Norway, Europe’s top gas provider, remain below capacity amid prolonged seasonal maintenance. Algerian gas flows to Italy have been lower than usual since Sunday, according to data from Italy’s transmission system operator. And in the Netherlands, extraction from the major Groningen gas field stopped on Oct. 1 as planned, after the damaging impact of earthquakes.  

Dutch front-month gas, Europe’s benchmark, declined to €39.34 a megawatt-hour. Month-ahead German power futures also dropped. 

Gas and power demand is expected to be higher in the fourth quarter than a year ago, according to analysts at S&P Global Commodity Insights. They see gas needs rising by 5.9%, after being mostly subdued this year as manufacturers and households curbed consumption.

--With assistance from Elena Mazneva.

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