TTF front-month drops below €40/MWh
The front-month contract at the TTF gas hub dropped below €40/MWh ($458/'000 m3) on March 20 for the first time since 2021, ICE data shows.
European gas prices have been falling fairly steadily since December thanks to mild temperatures, ample LNG, high gas storage levels and demand reduction and destruction. These factors have helped mitigate the impact of a steep cut in Russian pipeline gas supply to the continent.
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"We are mow then halfway through ... the last winter month, and approaching spring with seasonally much weaker gas demand," analysts at DNB Bank noted, according to AFP. "Gas inventories are still close to seasonal record levels, and 20% above normal levels."
Europe's gas storage facilities are just under 56% full currently – a historic high for the time of year, although European policymakers are anxious to ensure enough gas gets injected back into storage over the coming months to safeguard against shortages next winter. The EU is preparing a tender for joint purchases of gas volumes for storage next month, in a bid to drive down prices.
Low gas prices could stimulate higher demand through some industry scaling up production and as a result of coal-to-gas switching.