Wedoany.com Report-Nov 1, European natural gas prices plunged on news that buyers are nearing a commercial agreement with Azerbaijan to keep supplies flowing to the continent after a transit deal between Russia and Ukraine expires at year’s end.

Benchmark futures for December delivery settled 1.9% lower on Thursday after slumping as much as 8.1% earlier. Earlier this week, the front-month contract reached the highest level this year.

Companies from Hungary and Slovakia are close to signing a contract for as much as 12-14 billion cubic meters of gas a year from Azerbaijan, Bloomberg News reported. It would employ the same pipeline network that now carries Russian gas across Ukraine to the European Union. The deal is yet to be finalized. 

Europe’s gas market has been volatile in recent months, in part over concern that supplies may be halted. Yet the European Commission, the EU’s executive arm, has said energy security wouldn’t be at risk after the transit deal ends. Slovakia and Austria are among European countries that continue to import Russian supplies by pipeline. 

Gas traders are also weighing other factors in play such as weather forecasts and availability of liquefied natural gas in the winter.