Market Overview

17 January 2023

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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Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.

Mark Goichmann
Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

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