The price of European natural gas continues to fall inexorably. Thursday, May 18, it reached a new low for almost two years. The market remains well supplied, with comfortable mainland storage levels, and rising temperatures are lowering demand.
Around 2 p.m. GMT (4 p.m. in Paris), the Dutch TTF futures contract, considered the European benchmark, was trading at 29.90 euros per megawatt hour (MWh), shortly after reaching 29.85 euros per MWh, a price not seen since June 2021.
Europe less dependent on Russian gas
The Old Continent has greatly reduced its dependence on Russian gas. According to estimates by DNB analysts, Russia supplied around 40% of European gas imports before the war in Ukraine, compared to less than 10% currently.
The European Union last week launched its first international call for tenders for grouped gas purchases, in order to obtain better prices to replenish stocks before the winter of 2023-2024. Twenty-five suppliers have already responded to this call. These “group purchases” Europeans must make it possible to avoid the situation of the summer of 2022, when States and companies rushed to the gas market at the same time to build up their stocks, fueling the surge in prices.
Since the start of the year, European natural gas has fallen by more than 60%, far from its historic record reached in March 2022 at 345 euros per MWh, but still at high levels compared to previous years. In 2020, gas fluctuated around 15 euros per MWh.