Front-month TTF contract reaches 18-month low on Feb 21
The March TTF gas contract reached a new low of €49.3/MWh ($560/'000 m3) on February 21, ICE data shows, following a relatively steady slide from €140 in early December.
It was also the first time that a front-month contract has slipped below €50/MWh in 18 months, reflecting growing confidence among traders that Europe will not only make it through this winter with enough gas but also next winter as well.
Europe has enjoyed unseasonably mild weather since the start of January and ample LNG supply. Its gas storage facilities are also at 63.7% capacity, which is an historic high for the time of year. European gas prices have fallen by as much as 85% since August last year, when they spiked after Russia closed down the Nord Stream 1 for maintenance, prompting fears that the pipeline would not return to operation.
The latest record low at TTF comes as Russia prepares to mark the first anniversary of the ongoing war in Ukraine on February 24. With Moscow widely accused of weaponising gas supply over the past year to force Europe to make concessions in the conflict, former Russian president Dmitry Medvedev had predicted that European would be "freezing in their homes this winter."
Shortages were also avoided in part thanks to EU efforts to encourage consumers to save gas, as well as mandatory targets for member states to stock up on supplies before winter. There was significant demand reduction and destruction over the past half-year, with Eurostat estimating on February 21 that EU consumption was down 19.3% between last August and January this year versus the average for the same six-month period between 2017 and 2022.
The March TTF contract dipped to €49/MWh in initial trading on February 22, but as of 07:18 GMT was priced at €49.52.