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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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European Natural Gas Prices Drop To The Lowest Level Since 2021

  • A combination of weak demand and high storage levels have pushed European natural gas prices to their lowest level since November 2021.
  • As of May 22, natural gas storage sites in the EU were 66.22% full, according to data from Gas Infrastructure Europe.
  • While Europe’s natural gas situation is looking promising, the IEA has warned that the continent is not out of the woods yet.
Natural gas

Benchmark natural gas prices in Europe continued to fall on Wednesday, extending several weeks of losses amid weak demand in the spring and higher-than-normal inventories after the end of the winter.

The front-month futures at the TTF hub, the benchmark for Europe’s gas trading, fell by 1.5% to $30.84 (28.68 euros) per megawatt-hour (MWh) as of 10.33 a.m. GMT on Wednesday.   

That’s the lowest price since November 2021, when the energy crisis in Europe started ahead of the 2021/2022 winter season, with the crisis reaching a peak later in 2022 after the Russian invasion of Ukraine and the lack of most of Russia’s pipeline gas supply sent prices soaring.

Currently, demand for natural gas in Europe is weak after the winter heating season ended and summer demand is yet to begin. Gas consumption from industry, which went through a very rough patch last autumn and winter, is also weak.

Inventories, on the other hand, are comfortably high for this time of the year. As of May 22, natural gas storage sites in the EU were 66.22% full, according to data from Gas Infrastructure Europe. The level of gas in storage is the highest for this time of the year in at least a decade.

High inventories ahead of the summer and weak demand suggest that the worst of the energy crisis in Europe could be behind us.

Yet, analysts and officials warn that the EU shouldn’t be complacent ahead of the next winter season.

Despite the slump in Europe’s gas prices this year, the continent is “not out of the woods” yet as three factors could worsen the European energy crisis later this year, Fatih Birol, the executive director of the International Energy Agency (IEA), told CNBC this weekend.

Expected higher LNG demand in China after the reopening, the possibility of a U.S. default, and the remaining dependence on Russian gas are three reasons why Europe shouldn’t be complacent ahead of the 2023/2034 winter, the IEA’s top executive warned.

By Tsvetana Paraskova for Oilprice.com

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  • George Doolittle on May 24 2023 said:
    Europe East and West still being consumed by a massive recession so yes while speculators were able to drive up natural gas prices *"for a spell"* (limited duration) now arrives a deflation as the Turkish Lira crashes, the Russian Ruble crashes...everything *BUT* oil collapses in price upon Europe with the LME London Metal Exchange noting this problem as #ongoing all Year 2023. That Gazprom and Russia have gone all out to embargo natural gas as an act of War against Europe and this is the result is quite remarkable tho. Again by way of specific example the remarkably fast way Germany was able to build out LNG import facilities in order to mitigate a war created price shock "attack" shows Europe was far more prepared for such a contingency than certainly any commentator(s) on the situation thought...and current price action shows this to be manifested now imo.

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