(Bloomberg) -- European natural gas prices extended this week’s loss after the Kremlin changed procedures to pay for Russian gas, easing concerns that flows to the region will be cut off.
Benchmark futures settled 0.2% lower on Friday for a fourth straight day of declines. The contract closed the week 2.8% lower, the first such loss since early November.
On Thursday, President Vladimir Putin changed the way foreign buyers of Russian gas have to pay for supplies, easing concerns that US sanctions imposed on Gazprombank last month will lead to an early halt of supplies to Europe.
While Gazprombank remains the authorized bank to handle payments for Gazprom PJSC, Russia now allows money transfers via third parties. This could allow foreign buyers of Russian gas to use accounts in other banks to convert foreign exchange payments into rubles and transfer the money to Gazprombank.
Still, the European Union is pressing the US to explore ways to mitigate US sanctions on Gazprombank, with the discussions ongoing even after the Putin decree.
While Europe relies on a number of suppliers beyond Russia for gas, faster-than-usual storage withdrawals this heating season have left the market vulnerable to signs of disruption. Inventories are currently about 84% full, lower than this time last year.
Liquefied natural gas imports have also gained momentum recently and are helping to ease concerns around the supply outlook. Mild and windy conditions are forecast for the rest of the week, potentially helping the region to save fuel.
Dutch front-month futures, Europe’s gas benchmark, settled at €46.48 a megawatt-hour.
--With assistance from Anna Shiryaevskaya.
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