For a long time, a megawatt hour of natural gas cost only 20 euros, but as a result of the Ukraine war, the price temporarily rose to a maximum of 300 euros. Now the costs are falling again to 49.50 euros – the lowest level since August 2021. There are many reasons for the decline.
The price of European natural gas continues to fall. The price for the trend-setting futures contract TTF for delivery in one month fell below the mark of 50 euros per megawatt hour for the first time in a good year and a half. The low of EUR 49.50 was marked in the morning, which is the lowest level since August 2021.
Natural gas prices have risen sharply over the past year as a result of Russia’s war against Ukraine. At the peak, prices of more than 300 euros were paid, after natural gas had cost around 20 euros for a long time. The once high dependence on Russian gas had led to an energy crisis.
The current price decline, which has been taking place since last summer, is mainly due to well-stocked natural gas storage facilities, high imports of liquid gas and lower demand due to the weather. There are also savings, especially in industry, which produces less for cost reasons.
A flexible price cap has been available in the EU since Wednesday to protect business and consumers from excessive gas prices. In concrete terms, it is intended to prevent wholesale gas prices in the EU from being significantly higher than world market prices for a long period of time. According to an EU agreement from December, the mechanism is triggered when the price of the products exceeds 180 euros per megawatt hour for three working days and at the same time is 35 euros above the international average price for liquid natural gas. For the time being, however, this should not happen.
