European Gas Halts Weekly Advance Amid Push to Ease Crisis

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(Bloomberg) — Natural gas prices dropped on Friday, erasing a weekly advance, as the European Union seeks consensus on its plans to ease the worst energy crisis in decades.

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Benchmark futures fell as much as 3.9%, following extreme volatility this month. Rising gas stockpiles and ample supplies of liquefied natural gas have pulled prices back from August records, but they’re still about eight times higher than the typical levels for this time of year. 

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That’s underscoring the challenge policy makers face just weeks before the heating season officially starts amid record-low gas exports from Russia.

The European Commission this week proposed a number of measures to help reduce the impact of eye-watering energy prices on consumers. The plan includes raising 140 billion euros ($140 billion) from energy companies’ earnings, as well as mandatory curbs on peak power demand and boosting liquidity. The changes all need to be signed off by member states and discussions, which will continue this month, won’t be easy. 

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“The market now seems to be adopting a wait-and-see attitude,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “Gas is trading close to 200 euros, a level that is high enough to ensure a continued slowdown in demand.”

Meanwhile, the crisis continues to ripple through the broader economy. Germany is in advanced talks to take over Uniper SE and two other large gas importers in a historic step to avoid a collapse of its energy market.

Poland announced a power-price cap, France seeks to curb energy demand by 10%, and Spain supports replacing the continent’s traditional gas benchmark. The UK is set to meet with energy producers in a push to limit wholesale prices for low-carbon power. 

Dutch front-month gas, the European benchmark, was trading at 206 euros per megawatt-hour by 8:35 a.m. in Amsterdam, heading for a small weekly loss, the third in a row.

The Czech Republic, which holds the EU’s rotating presidency, has called an urgent meeting of energy ministers for Sept. 30, with the goal of reaching a deal before the winter heating season starts. 

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