The European gas price fell further on Monday to the lowest level in almost a month. The drop follows growing confidence that Europe will get through the winter without fuel rationing due to lower consumption and full storage.
On the important Amsterdam gas exchange, the price per megawatt hour fell by 4 percent to 51.79 euros on Monday morning. With a price level of around 50 euros, the gas price is once again close to the lowest levels since September 2021. At the height of the energy crisis at the end of August last year, more than 300 euros per megawatt hour still had to be paid.
Fears that Europe could experience gas rationing and power cuts this winter have not materialized due to a combination of factors. First, mild weather conditions limited the demand for gas for heating, and European countries have imported a lot of liquefied natural gas (LNG) to make up for the loss of Russian gas supplies. As a result, the gas storages are much fuller than normal for the time of year.
Sweden has already lowered the risk of a power outage from “real” to “low”, indicating that the worst of the region’s energy crisis is over, at least for this heating season. France has also put a number of nuclear reactors back into operation after a long interruption due to maintenance work.
European storages are currently, on average, about 65 percent full, according to data from Gas Infrastructure Europe. And the storage could even end the winter above 50 percent. That would be double the storage level a year earlier.
While that’s good news for energy security, it also creates a dilemma for some traders and energy companies who bought the fuel at its peak. Because the price has fallen more than 80 percent compared to the peak in August, that means selling the stored gas could potentially cost taxpayers billions of euros as some of the fuel was purchased with government money.