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European Natural Gas Prices Extend Gains as EU Scrambles to Bolster Supply Security, ANZ Bank Says

European natural gas prices extended gains and exceeded the 170-euro-per-megawatt-hour mark as the continent faces its biggest energy crisis, with Russian gas flows still dropping, Australia's ANZ Bank said in a Thursday note.

Dutch front-month futures rose for the sixth consecutive session and gained 3.6% amid ongoing fears of supply shortages as the dreaded closure of the Nord Stream pipeline for annual maintenance looms closer, the bank noted.

The rising gas prices are pushing electricity prices to record highs, ANZ Bank said. Germany's parliament is set to vote on legislation to allow it to curtail generation from stations not deemed essential for the security of supply, while European Union nations are scheduled to have an emergency meeting on July 26 to discuss improving winter contingency plans. Talks are likely to focus on coordinated efforts to cut gas consumption, the bank said.

North Asian LNG prices paused their rally as buyers got spooked by high prices, but inventories are falling below levels seen this time last year, ANZ Bank said. Thailand's PTT scrapped an earlier tender seeking LNG cargo, while Japanese buyers are struggling to reach a deal with suppliers. Competition with Europe is expected to remain high, according to ANZ Bank.