On Monday, benchmark natural gas prices in Europe dropped to their two-month lowest as the ongoing dip in demand from industry stimulated hopes that the continent would be able to get through the winter without the Russian import.

The front-month Dutch TTF contract, acting as a reference for all of northwest Europe, declined to as low as 171.30 euros a megawatt-hour (MWh) before retracing a little to stand at 177.50 EUR/MWh by 05:45 ET (09:45 GMT), a fall of 5.7 per cent from Friday’s close. Now, prices are down by nearly 50 per cent from their peak earlier in the summer.

Notably, Russian imports typically account for 40 per cent of the European total. However, they are currently running at less than 10 per cent of imports, reflecting European success in sourcing alternative gas over recent months. This is largely and primarily in the form of liquefied natural gas (LNG)..

Mandatory demand caps would exacerbate ongoing demand destruction. As per media reports, German industrial demand, which was running only 3.6 per cent below 2021 levels in April, was down 22 per cent from 2021 levels in August.