Storage tanks fill up again: European gas prices fall to summer levels

The weather is unusually mild over Christmas.

Storage tanks fill up again: European gas prices fall to summer levels

The weather is unusually mild over Christmas. The result: the European gas price continues to fall and is now at the June level. There is also good news from gas storage facilities.

Because of the comparatively mild temperatures, the price of European natural gas is falling. On Tuesday morning, the TTF futures contract for Dutch gas was temporarily trading at EUR 80 per megawatt hour. European gas was last this cheap in June. The TTF contract is the benchmark for the European price level. In the further course of trading, the contract was traded at EUR 81.70.

The gas price has been trending downwards since mid-December. During this time, the TTF contract has fallen by around 50 euros. The listing reached a record high of EUR 345 in the summer. At that time, a supply stop of gas from Russia had triggered a rapid rise. The market pointed to the mild temperatures, which keep consumption relatively low, as the reason for the falling gas price. During the Christmas holidays, the temperatures were significantly higher than in the middle of the month when permafrost prevailed in large parts of Germany.

Despite the recent relaxation, the price of European gas is still at a comparatively high level. In 2020, the TTF prices were below the 20 euro mark. On February 23, the TTF was quoted at EUR 85 and has not fallen below it since.

Not only has the price of European natural gas fallen in the past few days, the storage levels in German gas storage facilities have also increased constantly. "Germany has been storing gas again for five days," said the head of the Federal Network Agency, Klaus Müller. "The mild weather, which means lower consumption, more wind energy, which means less gas power generation and fewer exports to France have helped us."

According to the European storage association GIE, the storage level from Sunday to Monday rose by 0.38 percent to 88.22 percent. The bottom line is that Germany has not withdrawn any gas since Thursday. A similar trend could be observed in many other EU countries, but in Germany the storage levels increased at an above-average rate.

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