Almost five times cheaper than in August: Europe’s wholesale natural gas price fell to its lowest level since the start of the war in Ukraine on Monday, continuing its decline on the back of a relatively warm winter that saves inventory.
The benchmark contract for the continent, the TTF on the Dutch market, fell another 4.67% to 72.75 euros per megawatt hour (MWh) for delivery in February, around 9:35 a.m. Monday morning, the lowest price since February 21.
“Favorable climatic conditions”
The price of gas, for delivery the following month, has lost nearly 50% in one month… and has largely come down from the peaks of the summer: in August 2022, it had peaked at 342 euros per megawatt hour. Gas prices began to rise in the fall of 2021, with the start of a reduction in Russian gas deliveries to Europe, then very sharply from the invasion of Ukraine on February 24, 2022. Since then, gas pipelines between Russia and Europe have almost all shut down.
Volumes traded on Monday were weak as the main commodity market, London, was closed. This downward trend was made possible thanks to “significant gas stocks that have been built up and demand that is moderating, in particular thanks to favorable weather conditions“, explains Sebastian Paris Horvitz.
The price of gas affects electricity, as many European power plants burn gas to generate electricity.