EU gas prices drop to lowest since 2021

Unseasonably warm weather has substantially lowered demand for heating and eased concerns over gas storage levels

Natural gas prices in the EU dropped to levels not seen since September 2021, data from the London Intercontinental Exchange (ICE) shows.

The cost of gas futures for February delivery at the TTF hub in the Netherlands fell more than 11% on Monday, to trade at $645 per thousand cubic meters, or €57.6 ($62.3) per megawatt-hour in household terms around 11:00am GMT, according to ICE data.

Gas prices are declining amid unseasonably warm weather in Europe, which substantially lowered demand for heating and eased concerns over gas storage levels. Stores are currently filled to record highs for this time period at just under 82%. According to Gas Infrastructure Europe (GIE), gas withdrawals from EU storage facilities on January 14 amounted to 253 million cubic meters, the lowest since 2012.

Also, the share of wind generation in EU power supply remains very high since the beginning of the month. On January 15, it reached an all-time record of 35.4%.

European gas prices surpassed €345 per megawatt-hour at their peak last August, largely over concerns regarding Russian energy supplies amid sanctions and technical drawbacks.

READ MORE: Gas market to remain volatile for years – Qatar

In order to avoid price spikes in the future, last month, EU countries introduced an emergency cap on wholesale gas prices at €180 per megawatt-hour, which will kick in if gas futures trade at a higher level for three consecutive days. The cap will become effective on February 15.

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