European natural gas futures fell from a monthly high

European natural gas futures fell 7% to €33/MWh from a monthly high of €36 as investors realized the previous price rally was an overreaction.

European natural gas prices jumped 50% after a two-year low fell below 23 euros in early June due to supply problems following lengthy maintenance work at Norwegian production facilities.

However, while supply disruptions in Norway cut supply by 1.4 billion cubic meters, weaker-than-expected demand and abundant availability of liquefied natural gas weakened it by 3 billion cubic meters in May and June, according to Goldman Sachs Group Inc.

In addition, fears about the redirection of gas supplies to Asia have eased, as higher prices this month made it profitable for US LNG to ship to Europe over the next three months, rather than Asia.

At present, Europe's gas storage facilities are 72.6% full and the European Union aims to reach the 90% gas storage target by November 1st.