Milder weather, the end of a supply outage in Norway, and expectations of stronger winds in northwest Europe sent on Monday European benchmark natural gas prices down by 4% to the lowest level since September 2021.
Europe is more confident that there will be no gas shortages until the end of this winter, while the Freeport LNG export facility in the United States sent out the first shipment from storage since a fire halted exports in June 2022. These factors also dragged the TTF price, Europe’s benchmark, down by 4% to $54.50 (51 euros) per megawatt hour (MWh) midday in Amsterdam on Monday.
The UK’s wholesale gas prices also dropped today on expected stronger wind power generation on Tuesday.
The Swedish grid operator Svenska kraftnät said on Monday that it had downgraded the risk of power shortages to “low” from “real.”
According to Pontus de Mare, Senior Vice President of Power System Operations at Svenska kraftnät, the lowered perceived risk of power cuts is the result of an improved supply situation in northwestern Europe and a decline in electricity consumption during peak demand hours.
In Germany, the Federal Network Agency, Bundesnetzagentur, said on Monday that the gas supply in Germany is stable, and “It is unlikely that there will be a gas deficit situation this winter.”
Gas storage sites in Germany are 73.08% full, the regulator said, while data from Gas Infrastructure Europe shows that across the EU, gas storage sites were 66.48% full as of February 11, well above the five-year average for this time of the year.
Weather forecasts suggest temperatures will be higher than seasonal averages in the UK and northwestern Europe this week, which also means lower demand for heating and power generation from natural gas.
Norway’s gas supply to Europe also sharply recovered on Monday from Sunday after the end of an unplanned outage at the huge Troll gas field, easing concerns about immediate supply.
By Charles Kennedy for Oilprice.com
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