ALBAWABA – Gas prices in Europe have declined to the lowest since mid-2021, Bloomberg reported Sunday, as European Union (EU) inflation data, earlier last week, showed promising signs of relief for EU consumers.
Overall, gas futures have dropped by nearly two-thirds of their value since the beginning on 2023.
This decline will help the EU reverse the surge in inflation, mainly driven by the Russia-Ukraine war.
However, it also undermines Russia’s position as President Vladimir Putin has been squeezing the region’s gas supply, as Bloomberg put it.
In May, last year, Russia slashed gas supplies to Europe, and prices quadrupled. So much, so that countries had no option but to resort to coal to produce electricity.
Current European gas stockpiles are above average, the New York-news outlet confirmed.
Benchmark Dutch futures have fallen for eight straight weeks to below EUR25 ($26.83) per megawatt hour, the lowest since May 2021.
Increased imports of liquefied natural gas to replace Russian supplies have helped, as did a relatively mild winter.
Europe reserves are almost 67 percent full, compared with the five-year average of about 50 percent. German stockpiles are at 73 percent, according to data from Gas Infrastructure Europe.
The market is closely watching gas demand from China. European gas prices could fall even further, below EUR21.46 a megawatt-hour, if Chinese LNG imports prove very weak, according to analysts at Energy Aspects, as reported by Bloomberg.
