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The price of gas in Europe continues to drop due to global trade concerns and warmer temperatures

Dutch and British gas rates continued to drop on Monday morning, as fears of a trade war and warmer temperatures resulting in a weaker demand for energy weighed heavily on the market.

LSEG data shows that the benchmark Dutch front-month contract fell 1.75 euros, or $11.19/mmBtu to 34.70 Euros per megawatt hour.

The contract reached 33.65 Euros/MWh earlier in the year, its lowest level ever since September 2024.

The Dutch June contract is down by 1.92 Euros at 34.83 euro/MWh.

The British day-ahead contracts was down 4.25 pence to 85.25p/therm.

The global financial markets were shook by Donald Trump's tariff plans on Monday, after he warned that foreign governments would need to pay "a great deal of money" in order to remove the taxes he referred to as "medicine".

These tariffs include an additional 20% on products from the European Union. This has caused concern about a slowdown in Europe's economy and a reduction in industrial activity. In a daily report, LSEG analyst Oleh Skrynyk stated that this has contributed to a bearish feeling on the gas market.

The benchmark contract dropped around 9% Friday after China announced reciprocal duties on U.S. products, intensifying a trade conflict that has caused investors to price in an increased probability of recession.

The gas market was also affected by the expectation of warmer temperatures.

In a daily report, Engie EnergyScan analysts said that "Gas Demand in Local Distribution Zones" (LDZ) has continued to fall amid temperatures above normal in many European countries.

The European gas storage sites finished the winter heating season almost two thirds empty on March 31, and current low prices are expected encourage more injections.

In a daily note, the consultancy Auxilione stated that "fears about being able fill gas storages in this summer has changed and an advantage is being taken to start this process."

The benchmark contract on the European carbon markets was down by 3.51 euros, at 60.31 euro per metric ton. (Reporting by Susanna Twidale, Editing by Varun K.)

(source: Reuters)