The cost of gas in Europe fell to the lowest level since the summer of 2021

The gas price in Europe is currently 35.2 euros per MWh, the lowest since July 2021, i.e. since the beginning of the energy crisis.

Analysts at the Financial Times say publications edition notes:

“On Friday, the European benchmark TTF hit a low of 35.2 euros per MWh, a level last seen in July 2021, when Russia first began cutting off energy supplies to Europe on the eve of its invasion of Ukraine.”

Last summer, the article says, the TTF benchmark peaked at over 340 euros/MWh after Russia cut gas exports to Europe, causing inflation and skyrocketing electricity bills. Martin Ratz, an analyst at Morgan Stanley, believes that Europe can now fill its gas storage facilities, which are critical to meeting winter demand, to 100% capacity, even if Russian supplies drop to zero.

The analyst claims that prices are now falling to slow the arrival of seaborne liquefied natural gas cargo that Europe tried to secure last year to replace Russian flows.

And yet, compared to historical levels, gas prices still remain high. In 2019, the TTF averaged less than 15 euros, and the pre-crisis price peak was reached in 2018 at 29.17 euros. Even adjusted for inflation, this is still slightly below the level at which prices are trading today.

The publication notes that the international energy agency, in its recent quarterly report on the state of the gas market, said that this year the balance of supply and demand in the global gas market “is subject to an extremely wide range of uncertainties,” ranging from weather and LNG availability to the possibility of further cutbacks in Russian pipeline gas supplies to Europe.

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