OMV cuts its natural gas price forecast for this year by more than 33% to 40 EUR/MWh

Austrian energy giant OMV cut its forecast for gas prices at the German trading hub THE for this year by more than 33%. The company revised its original forecast for an average price of 60-70 EUR/MWh to 40 EUR/MWh. It also announced a new 10-year contract to buy liquefied natural gas (LNG) from another European energy giant.

Natural gas price trends

Spot natural gas prices fell sharply around the turn of the year, particularly as a result of a combination of mild winter weather and lower demand from industry. Industrial demand for gas has yet to recover, helping the EU fill its storage facilities faster than it had expected.

Storage facilities across the bloc are now more than 85% full. Spot gas prices could therefore fall further in the short term before the start of the winter season, when demand rises. This depends on gas flows into the EU remaining at their current levels, which would allow storage facilities to be filled completely, leaving nowhere to store additional gas and no way to consume it immediately.