Europe’s gas prices have fallen below €100 per megawatt-hour for the first time since mid-June, as mild autumn weather tame demand and storage facilities reach near-total capacity.
At the end of Monday, the Dutch Title Transfer Facility (TTF), Europe’s leading trading hub, futures contract for November closed at €99.17 per megawatt-hour (MWh).
Tuesday morning showed a similar trend, with prices hovering around €95 MWh.
While prices remain exceptionally high, the news offers some relief for consumers under financial stress.
Wholesale prices directly impact the retail price that households and companies pay every month. These final bills also contain extra costs related to network maintenance, taxes and operational fees.
The last time gas prices fell below the €100 MWh mark was mid-June.
Prices then rose at a pronounced rate as governments rushed to fill underground gas storage and Russia’s manipulation of supplies fuelled speculation.
The TTF broke all-time records when it reached €349 MWh in late August.
After that, prices began to decrease gradually.
The EU’s average storage capacity is now at 93%, which means governments do not need to buy as much backup gas as they did in previous months.
At the same time, industrial production and consumer consumption are being constrained by high energy bills, leading to a dip in demand and a consequent fall in prices.
It’s unclear how long the drop in gas prices will last.
EU officials fear a colder-than-usual winter will stoke demand for electricity and heating, push prices to unsustainable highs and aggravate the economic recession.
Futures contracts for the upcoming months showed prices well above the €100 MWh threshold.
The energy crisis remains high on the EU’s agenda.
Last week, the issue of price caps took centre stage at the European Council in Brussels.
At the end of the meeting, leaders gave the European Commission the go-ahead to put forward a mechanism to curb extreme cases of speculation and volatility at the TTF.
However, this instrument will not be a broad price cap, as some EU countries have demanded, and will instead act as an emergency ceiling.
“The time has come,” said European Commission President Ursula von der Leyen. “It is important to move with a clear signal that we are willing to be reliable partners on the market but not at any price anymore.”
In parallel, the Commission is working on a separate, distinct trading hub only for liquefied natural gas (LNG). The executive argues the TTF is overly influenced by the ups and downs of pipeline gas flows.