Europe's benchmark natural gas prices fell in February for the third consecutive month, extending the monthly losing streak to the longest since 2020, as milder weather, comfortable inventories, and a plunge in demand dragged down prices.
The front-month futures at the TTF hub, the benchmark for Europe's gas trading, lost 19% in February, and have slumped by around 40% since the beginning of the year, according to Bloomberg's estimates.
On the last day of February, the TTF futures settled at $49.50 (46.67 euros) per megawatt-hour (MWh) in Amsterdam, down by 1.3% on the day.
Last month, the benchmark European price fell below the threshold of 50 euros ($53) per MWh for the first time since August 2021. Prices are now more than 85% down from the record high of 300 euros ($318) per MWh from August 2022. With only March left to go in the winter, concerns about a gas crisis in Europe continue to recede amid mild weather and above-average inventories across the continent.
One year after the Russian invasion of Ukraine, the Dutch TTF benchmark gas contract is trading more than 40% below pre-invasion levels, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said in a weekly commodities insight last week.
"This has been driven by a combination of mild winter weather and, in most cases, a voluntary reduction in demand from consumers and industry," Hansen said.
"Apart from a strong pick up in gas demand from China, these developments should see Europe comfortably through next winter as well," he noted.
The European Union managed to beat its target for cutting gas demand this winter, Eurostat data showed last week. According to the data, the EU's winter demand had so far dropped by 19.3% compared to the five-year average, beating the 15% goal it set for itself to help it survive the winter.
Natural gas consumption in OECD Europe fell by an estimated 13% in 2022, its steepest decline in absolute terms in history, the International Energy Agency (IEA) said in its quarterly gas report on Tuesday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More