European gas prices fall as EU proposes plans for Russian payments

The European Union’s plan to offer energy companies a way to pay for Russian natural gas without violating sanctions helped keep prices lower for a second day as billing deadlines loom.

Enchmark gas futures in the Netherlands fell as much as 3 percent on Monday, extending Friday’s 9.2 percent loss.

The European Commission will offer buyers new guidelines on how to pay for gas to meet President Vladimir Putin’s demands while avoiding a potential breach of penalties imposed as a result of Russia’s invasion of Ukraine.

Traders have been eagerly awaiting an update to the European guidance, with most payment deadlines due by the end of the month.

Russia had asked companies to accept a new transaction method that would involve opening two accounts with Gazprombank, one in euros or dollars and one in rubles.

In the new guidance, Europe plans to tell companies they should make a clear statement that they will consider obligations met once they pay in euros or dollars in accordance with existing contracts, according to people familiar with the matter.

The bloc could also cap gas prices if Russia cuts or significantly curbs supplies, according to draft energy market intervention measures seen by Bloomberg News.

Dutch front-month gas, the European benchmark, fell to €94 a megawatt-hour before trading 2.8 percent lower at €94.2 as of 8:32 am in Amsterdam.

Based on supply orders, Russian gas flows through Ukraine are expected to be lower on Monday.

Gas supplies to Europe via the route were curtailed last week after a key cross-border entry point was shut down due to troop activity on the ground.

That helps support prices. European gas prices fall as EU proposes plans for Russian payments

Fry Electronics Team

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