After reaching a low in 2022, natural gas prices in Europe are seeing a sharp decline, especially in the month of February. Indeed, the price of natural gas in the old continent has reached its lowest level since 2021.
At the end of this week, the Dutch TTF was sold at a price of 22.45 euros per megawatt hour (MWh), representing a decrease of 3.2%, the site boursorama.com indicates. A downward trend also for its British counterpart which reached 55.42 pence per therm (unit of heat mass). According to Energy Denmark analysts, this drop in natural gas prices is possible because “ The end of winter is approaching with high inventory levels “
This decline in natural gas prices is also due to other parameters, especially higher than normal temperatures in the old continent, in addition to a sharp decline in industrial and domestic demand. It must be said that the level of natural gas reserves in Europe is very high. This is the highest in 5 years. Indeed, according to figures from the European Aggregated Gas Storage Inventory (AGSI) platform, the gas reserves of the European Union are 65.9% (71.56% for Germany, 60.3% for Italy and 51.3% for France).
According to Francisco Blanch, commodity strategist at Bank of America Global Research, the decline in natural gas prices in Europe is expected to continue into next spring. However, the expert clarifies that certain parameters can change the situation. Francisco Blanch specifically mentioned global demand for industrial gas which is beginning to rise again, plus the situation in the Red Sea which remains as worrying as ever.
What about gas prices in France?
The Energy Regulatory Commission (CRE) in France announced further reductions in benchmark gas prices for the month of March. This downward trend, already seen in January and February, represents good news for families. Indeed, a drop of around 5% compared to February could be reflected in consumer bills.
Unfortunately, this drop will not last, as there are plans to significantly increase gas distribution tariffs by summer. ” Taking this development into account, CRE’s current estimates expect an average benchmark price of around 120 Euro/MWh (including tax) for July 2024, which is around 6 Euro/MWh lower than the average price for December 2023 (including the announced increase on infrastructure). prices) », informed CRE.
