European gas prices fall to 18-month low on weather and peace talks

The wholesale price of gas for the European market fell below 28 euros (677 Kč) per megawatt-hour (MWh) this morning, reaching its lowest level in more than 18 months. Milder weather in the region is reducing demand for heating, while the market is also waiting for progress in US-led peace talks between Russia and Ukraine, Reuters reported.

The price of the key front-month gas futures contract at the Title Transfer Facility (TTF), a virtual trading hub in the Netherlands, was down 3.4 percent at 27.83 euros per MWh shortly before 12:00 CET. This was its lowest level since mid-May last year.

Temperatures in northwestern Europe are expected to remain close to normal this week, averaging around five degrees Celsius. According to forecasts, they will be even higher next week, reaching 6.8 degrees.

LSEG analyst Ulrich Weber noted that the gas market remains calm, mainly due to expectations of mild weather. Peace talks between Russia and Ukraine are also contributing to lower prices, although progress has been slow and their impact on the European gas market is expected to be limited. With milder weather also expected in December, gas prices are likely to fall further, Weber said.

European gas storage facilities are 75.75 percent full. That is less than a year ago, when they were 85.74 percent full, according to data from Gas Infrastructure Europe.