European natural gas continues to trade downwards and this Thursday reached the lowest value in two years, with comfortable storage levels in Europe and an increase in temperatures that slows down demand.
At 3:20 p.m. (Lisbon time), the Dutch TTF futures contract, considered the benchmark in Europe, was trading at 30.25 euros per megawatt hour (MWh), moments after falling to 29.85 euros, the price lowest since June 2021.
“The global level of natural gas consumption continues to fall” with rising temperatures in Europe, explains Bjarne Schieldrop, an analyst at Seb, in a note.
“Global warming reduces demand for gas for heating,” he added, as expected short-term temperatures are above average for this time of year, reducing demand.
Storage levels in Europe are also well above average, according to analysts at Energi Danmark, quoted by AFP.
“You stocks are close to record levels for this period of the year,” Schieldrop also indicated, recalling that demand remains weak.
“The European energy crisis was effectively stopped thanks to an exceptional adaptation of the European Union (EU), after the invasion of Ukraine by Russia,” he said.
Europe has drastically reduced its dependence on Russian gas. According to estimates by DNB analysts, Russia provided around 40% of gas imports in Europe before the war in Ukraine and less than 10% today.
On Tuesday, the European Commission announced that it had received proposals from 25 companies for the supply of more than 13.4 billion cubic meters of gas, within the framework of the first joint public tender at the European Union (EU) level.
After this first tender, a second round of aggregation of demand and tenders will be held in June, to be followed by three more rounds until the end of the year.
Since the beginning of the year, European natural gas has fallen by more than 60%, far from the historical record of 345 euros per MWh of March 2022, but still at high levels compared to previous years. In 2020, the price of gas stood at 15 euros per MWh.
Source: TSF
