Warm weather and energy savings are pushing the price of natural gas down. Is Europe past its worst?

Warm weather and energy savings are pushing the price of natural gas down. 

While at the end of August last year the price of natural gas on the spot market in the Netherlands had risen to more than 340 euros per megawatt-hour, today the same unit is trading at around one-sixth of that level.

Relief for the European Union

It seems that the European Union can breathe a sigh of relief. The combination of warm weather and planned savings in natural gas consumption have meant that gas storage tanks will be much more full after this heating season than it seemed in mid-December. It will be much easier for the 27 to prepare for the 2023/2024 heating season.

According to projections cited by Reuters, the volume of natural gas in storage in the European Union will be around 612 terawatt hours at the end of this year’s heating season. In October last year, these projections were for a stock of around 440 terawatt hours.

The favourable situation for the EU continues

So if the rest of the heating season follows the average of several years, the EU will have less than 40 percent more gas in storage than it seemed a few months ago. The favourable situation is also reflected in the natural gas spot market in the Netherlands, where a megawatt-hour is trading at around €55, about one-sixth of the level at the end of August last year.


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