High electricity prices in Europe are expected to ease. Bloomberg reported that China's largest liquid natural gas (LNG) supplier is preparing to supply natural gas to Europe, which is expected to ease the European fuel shortage.

European gas prices plummeted on the news, with benchmark futures down as much as 8.9%. China has ample natural gas reserves. According to Bloomberg News, Sinopec is expected to sell dozens of batches of spot LNG this year and more natural gas will enter Europe in the future, which will help ease the pressure caused by low natural gas inventories in Europe and reduced gas supplies from Russia.

As LNG deliveries increase, coupled with good weather forecasts and a resumption of gas supplies in Norway, there may be some relief from dire electricity price situation in Europe, which has more than tripled last year and now has the chance to end.

A report from consultancy Rystad Energy pointed out that, although Asian demand is stable, European LNG demand remains strong and the natural gas market is cautiously bearish this week. After all, the United States may also be shut down due to weather in the next few days. Analysts at Citibank noted that natural gas prices in Europe and Asia should "peak this winter" unless there is a severe cold snap in the next two months or a significant escalation of geopolitical tensions in Russia.

At present, Russian natural gas exporter Gazprom PJSC refuses to provide spot natural gas quotations but the long-term contract gas supply has dropped sharply and tensions in Ukraine and the Russia-Germany Nord Stream 2 dispute has attracted the attention of traders. Germany said that if Russia uses energy as a weapon, then Nord Stream 2 is a sharp blade. In response, Moscow reiterated that it has no plans to attack Ukraine. Rystad Energy said Russia would increase its supply of as much as 30 billion cubic meters of gas this year but be prepared for those supplies to dry up if tensions escalated into a military conflict.

(Source: Nord Stream 2)