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By Bloomberg

European natural gas traders are the least bearish since May after Russia and Ukraine failed to reach an agreement to keep supplies of the fuel flowing for the next three months.

Eight of 18 traders, brokers and analysts surveyed by Bloomberg were bearish front-month gas in the U.K., Europe’s biggest market, while five were bullish and five were neutral. That’s the smallest proportion of bears since May 8. Ukraine halted imports of Russian gas after its neighbor took away most of a price discount and refused to sign a deal through winter.

Russia supplies more than 10 percent of Europe’s gas needs using pipelines that cross Ukraine, stoking speculation flows might be disrupted in a repeat of wintertime halts in 2006 and 2009. A stoppage of Russian flows may curtail Ukraine’s ability to fill gas-storage facilities before next winter. The nation, which now has 12 billion cubic meters (423.8 billion cubic feet) of inventory, needs 19 billion to 20 billion, according to Gas Infrastructure Europe and researcher Eurasia Group.

“Even though current levels of storage seem sufficient, a colder winter could pose problems,” Wayne Bryan, an analyst at Alfa Energy Group, said by e-mail Wednesday. “Another factor is that we still have circa 12 weeks of injections. Amounts injected will be reliant upon resumption of flows from Gazprom or an increase in purchases from alternative suppliers.”

TTF Hub

U.K. gas for August delivery added 0.7 percent to 42.87 pence a therm ($6.69 a million British thermal units) on the ICE Futures Europe exchange at noon in London, extending Wednesday’s 1.1 percent gain. The equivalent Dutch contract rose 0.5 percent to 20.77 euros ($23.01) a megawatt-hour on the Title Transfer Facility hub, broker data compiled by Bloomberg showed.

Ukraine can store 15.8 billion cubic meters of gas before the winter without Russian supplies due to lower demand and increased capacity to import fuel from the European Union, said Thierry Bros, an analyst at Societe Generale SA in Paris. The nation, which can import gas from Slovakia, Hungary and Poland, may face minor shortages if there’s no resumption of flows from Moscow-based OAO Gazprom before summer ends, he said Wednesday.

Traders in the Bloomberg survey were also less bearish Dutch fuel for next month. Ten of 19 respondents were bearish, four were bullish and five were neutral, the smallest proportion of bears since May 1. Talks between Ukraine, Russia and the EU on gas supplies for the fourth quarter should start in September, according to Russian Energy Minister Alexander Novak.

“Both Russia and Ukraine have a vested interest in ensuring that gas continues to flow to Europe, and will ensure sufficient reserve pressure in the Ukrainian system to accomplish that,” Daragh McDowell, an analyst at Verisk Maplecroft, said by e-mail Wednesday. “It is difficult to forecast at this point whether the next round of negotiations, scheduled for September, will be more successful.”