Natural gas trading: European gas prices fall to their lowest level in six months

Natural gas trading: European gas prices fall to their lowest level in six months

The Price of European natural gas has fallen to its lowest level since July 2023. The virtual trading point TTF fell to below 26 euros per megawatt hour on the Dutch stock exchange in Amsterdam. TTF is considered a trend-setting for the European Gas price. In the morning, the futures contract cost 25.82 euros per megawatt hour, making it cheaper than it has been in more than half a year.

Due to the war in the Middle East, the price rose to over 50 euros in October. However, a trend reversal began in November. Since the beginning of the year gas has become cheaper by around 20 percent. The decline is explained, among other things, by the rather weak economy in the EU. This is also slowing down gas demand in Germany.

Low price is also related to low consumption

According to the Federal Network Agency, Germany reduced its gas consumption at the end of 2023. In the months October to December, this was 16 percent below the average consumption in industry from 2018 to 2021. Gas consumption by households and businesses was also 16.7 percent lower. To explain this, the network agency also refers to the temperatures: In 2023, these were above the average for the years 2018 to 2022, which had a major impact on consumption.

The Houthi militia’s attacks on merchant ships in the Red Sea have also barely made gas more expensive recently. Raw materials experts assume that this will not affect supplies in Europe. The gas price level is also well below the highs reached during the Russian war against Ukraine. After Russia severely cut back on its gas deliveries to Europe, the price per megawatt hour was at times more than 300 euros during 2022.

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