European gas prices fall below 40 euros, lowest since July 2021

Wholesale gas prices for the European market continue to fall. At the Title Transfer Facility (TTF), a virtual trading hub in the Netherlands, they fell below 40 euros (about CZK 959) per megawatt-hour (MWh) today. This is their lowest level since July 2021. The main reason is weaker demand due to warmer weather during the winter months and full storage facilities.

The price of the key April-delivery gas futures contract at TTF fell by around six percent, reaching as low as 39.65 euros per MWh.

Natural gas prices rose sharply last year because of Russia’s war against Ukraine. At their peak, they exceeded 300 euros per megawatt-hour. Previously, gas had traded at around 20 euros per MWh for a long time. Gas prices fell below 60 euros per megawatt-hour in mid-January, and below 50 euros in mid-February.

Heavy dependence on Russian gas led to the energy crisis. There are several reasons for the price decline in recent months – natural gas storage facilities are well stocked, and mild weather is helping reduce demand for the commodity. More recently, concerns about a banking crisis have also been pushing prices down, as financial crises are usually associated with a strain on the economy and, consequently, lower energy demand.