European natural gas falls below 30 euros per megawatt hour, a first since June 2021

European natural gas continues to decline. The Dutch TTF futures contract, an index considered the European benchmark for gas, stood at 29.90 euros per megawatt hour (MWh) on Thursday May 18 at 4 p.m., shortly after hitting 29.85 euros on MWh. The price of gas thus reached its lowest level since June 2021.

The market remains well supplied, with comfortable storage levels in Europe. “Inventories are near record highs for this time of year”, explains in a note Bjarne Schieldrop, of the group of analysts Seb. Europe is thus well on its way to rebuilding its stocks before next winter. In parallel, “the overall level of natural gas consumption has continued to decline” with rising temperatures in Europe, adds Bjarne Schieldrop. Heating demand is the main source of gas consumption for individuals.

Decline in dependence on Russian gas

“The European energy crisis has effectively been halted thanks to an exceptional adaptation by the EU following Russia’s invasion of Ukraine”, he says. The Old Continent has greatly reduced its dependence on Russian gas. According to estimates by DNB analysts, Russia supplied about 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. These European “group purchases” should 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.