By Geoffrey Smith

Investing.com -- European natural gas prices fell at the open on Monday as big gains on the battlefield for Ukraine raised hopes for a quick end to the war and to the destructive mutual economic blockade between the West and Russia.

By 03:45 ET (07:45 GMT), the front-month October TTF contract in the Netherlands, which serves as a benchmark for northwest Europe, was down 8.3% from Friday's close at 191.50 euros a megawatt-hour, having earlier touched a one-month low of 195 EUR/MWh.

Prices were also capped by signs of big ongoing flows of liquefied natural gas to Europe from the U.S. and Africa, as the continent ramps up its efforts to fill storage before the peak winter heating season. In addition, European Union officials are also considering the sale of carbon permits from official reserves, something that would allow greater coal- and oil-fired power generation, reducing the need for expensive gas.

Data from Gas Infrastructure Europe suggest that net injections into storage are still continuing, with facilities across the EU now 83.6% full on average. While that's comfortably ahead of the EU's target, analysts still warn that a complete shutoff of Russian gas flows would make further injections effectively impossible.

Russia is still shipping small amounts of gas - around 9% of EU consumption - through other pipelines, but the risk of a complete stop has risen after President Vladimir Putin threatened such a move last week in response to EU proposals to impose a cap on the price of Russian gas imports.

The outlook for Russian policy has become much more unclear as a result of the spectacular success of Ukraine's counter-offensive over the last 10 days, in which its army liberated large swathes of territory and forced a shambolic retreat by Russian forces. Russia reacted on Sunday with missile strikes on power generation and water treatment facilities in eastern Ukraine, causing widespread blackouts and the suspension of water supplies.

According to various reports Putin canceled a meeting with defense chiefs on Sunday, firing the head of the Western Military District Roman Berdnikov, only 16 days after appointing him. Unconfirmed reports on Russian social media suggested that Putin had faced unusually frank criticism from defense chiefs at their previous meeting.

"It will take some time and further developments to assess whether Ukraine can capitalize on its gains and this in turn triggers a new stance from Russia on its energy policy," analysts at Saxo Bank said in a morning note to clients.