The price of natural gas futures for June has fallen below the €25 per megawatt-hour-mark, the lowest level since September 2021.
Natural gas futures for June had already fallen below €30 per Mwh on the Netherlands-based Title Transfer Facility (TTF) exchange earlier this week.
While the TTF price at the start of 2021 was around €17 per Mwh the end of Covid restrictions, the worsening security situation and a cut in Russian supply meant that from the second half of that year, the TTF price began to rise, only to jump further with Russia's invasion of Ukraine and the stated need to decouple from Russian gas supply, which requires payment in roubles (in fact many EU countries continued to purchase Russian gas long after the invasion started).
The peak was reached in August 2022, when the TTF futures price reached nearly €340, after which it slowly started to fall, reaching the €100-mark around the start of this year.
A major factor in the fall in price relates to both supply: European gas storage facilities, which are reportedly topped up almost to capacity, and to demand: A relatively warm spring plus consumers being more accustomed to using smaller volumes of energy than before.
Editor: Andrew Whyte