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Market Overview
Gas Prices in Europe Fell Below 52-Week Lows amid Stalling Demand
Gas prices
in Europe continue to fall this week to extend a downward trend that started in
December 2022 when Dutch TTF Gas Futures touched 150 Euro per MWh. By January
17, prices of March futures dropped to 53.605 Euro per MWh. This level is below
the 52-week low and may signal a further decline of gas prices.
This year
gas futures started at 79.4 Euro per MWh and quickly dropped down. The reason
for this drop is primarily the deteriorating
demand for gas in Europe. Deutsche Bundesnetsagentur (BNetzA), a German Federal Network Agency, reported that the demand for gas is 38%
below the average for 2018-2021. Such low demand was not only caused by warmer
than expected weather last autumn and this winter, but also by a lower producer
demand for gas. Massive gas saving measures approved in the EU, and alternative
gas deliveries prompted to replace Russian gas are also largely contributing to
the stalling demand. The portion of Russian gas consumed in European dropped
from 40% in 2021 to 7-9% in 2023. Gas storages across Europe are full of gas
reserves at 81.7% as of January 14, despite the fact that half of the winter
heating season has already passed.
Even rising
crude prices to $85 per barrel of Brent crude has hardly affected gas prices.
This week gas prices are expected to move within the range of 41-65 Euro per
MWh.
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