Home Commodities The price of gas in Europe falls to the level before the energy crisis

The price of gas in Europe falls to the level before the energy crisis

by SuperiorInvest

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The price of European gas has fallen to a level last seen before Russia began cutting supplies in 2021, offering hope that an energy crisis that has plagued the region for the past three years may be coming to an end. its end.

Strong imports of liquefied natural gas, warm weather and reduced demand as a result of high prices in recent years have helped keep gas stored in EU underground storage facilities at historically high levels this winter , putting pressure on prices.

The price of the Title Transfer Facility (TTF), the European benchmark index, fell to 22.53 euros per megawatt hour on Friday, the lowest level since May 2021, on track for a third consecutive weekly drop.

Europe's energy crisis began in 2021 as the region emerged from a prolonged cold winter with low levels of natural gas storage. Concerns about supply shortages were exacerbated when Russia began shipping less gas to Europe, with traders speculating at the time that it was a tactic to pressure European governments, including Germany, to approve the launch of the highly controversial Nord Stream 2 gas pipeline.

TTF (€/MWh) line chart showing the fall in gas prices in Europe

European gas prices peaked in the summer of 2022, soaring to over €300/MWh at one point, as Russia further reduced its supplies to the region following its invasion of Ukraine and use of its weapons. abundant gas reserves.

Since then, concerted efforts by EU nations to curb demand, as well as strong LNG imports from countries such as the United States and consecutive warm winters have helped ease gas supply shortages in Europe.

Piped Russian gas, which accounted for 40 percent of EU supplies before the invasion, has fallen to 8 percent, according to the European Commission.

EU gas storage facilities were more than 64 percent full as of Wednesday, a record for the time of year, according to data from Gas Infrastructure Europe, an industry body.

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