Europe’s gas prices slump by 11% due to warmer weather forecasts

At Tuesday’s opening in Amsterdam, the benchmark European natural gas price plunged 11%. This brings the month’s loss to 20%. Wind generation is expected to recover, and the current cold snap will soon end.

After forecasts began to indicate that warmer temperatures in northwest Europe next week, the Dutch TTF price was trading at $65 (60 Euros) per megawatt hour (MWh), on Tuesday. According to Bloomberg’s forecasts by Maxar Technologies, the warmer weather will continue through February 1.

Additionally, EU gas inventories remain unusually high for this season – 77% full across Europe and well above the 5-year average for winter heating season. In the absence of Russian pipeline gas, the high storage volumes and constant influxes of LNG cargoes have eased supply worries.

The milder winter so far, particularly at the beginning of 2023 and the end of December, has been a big help.

Last week, Europe’s benchmark gasoline prices rose for their first weekly gain in many weeks. This was in anticipation of colder weather in large gas-consuming countries northwestern Europe.

Prices had plummeted to levels last seen prior to the Russian invasion. Gas prices have fallen in recent weeks due to mild weather, large quantities of gas stored in storage locations, and ongoing LNG imports.

The Freeport LNG export terminal in the United States may resume exporting cargoes towards the end of winter heating season after being shut down in June due to a fire.