Europe is breathing a sigh of relief as wholesale gas prices have plummeted to their lowest level since September 2021. Prices for gas to be supplied in March dropped by over 4% to €51.60 per megawatt-hour, a stark contrast to the €79 at the start of the year.
This is a remarkable turnaround from just six months ago when gas prices were above €300 and countries were preparing for winter rationing and blackouts.
The price decrease is due to mild weather and steady imports of liquefied natural gas (LNG) to compensate for lost pipeline flows from Russia. Gas storage levels are much higher than usual for this time of year.
Sweden has even downgraded its risk of power cuts to “low”, indicating that the worst of the continent’s supply crisis has passed.
Cheaper fuel to produce power, along with warmer weather, is set to ease the strain on power stations and grids in the region. The Freeport LNG plant in Texas has also resumed shipments from tanks, a major step towards a full restart.
An unplanned outage at the Troll field in Norway has also ended, boosting supply from Europe’s key gas provider.
Overall, Europe is in a much better position than it was just a few months ago. With gas prices at their lowest since September 2021, the continent is now in a much more stable energy situation.