Europe’s wholesale natural gas prices fell Monday to their lowest level since Russia invaded Ukraine, which had driven them to a record high last year.
A mild winter has enabled countries to tap less gas from stocks that were built up in anticipation of cuts in supplies from Russia, which was Europe’s main supplier before the war.
The benchmark European contract — Dutch TTF gas future for the coming month — soared to a record $367 per megawatt-hour in March. It still reached as high as $364 in August.
But prices have been falling since then, hitting $77 on Monday — 50% down from a month ago and the lowest level since before the war on February 21.
Gas exports by Russian energy giant Gazprom to the European Union and Switzerland fell by 55% last year, the company said Monday.
Europe was previously Gazprom’s main export market, but supplies have been drastically reduced because of sanctions following Russia’s offensive in Ukraine in 2022.
European nations filled up their gas storage facilities and launched campaigns to encourage consumers to save on energy during the winter.
European storage levels were at 83% on Monday, reducing the need to buy more gas for now.
The EU has scrambled to find new sources of natural gas in efforts to cut its heavy reliance on Russian supplies.
EU nations have also adopted a mechanism to cap natural gas prices, but analysts say it will likely have only a limited impact on reducing what businesses and households pay.
Experts have warned that a cold snap could send gas prices rising again.
Russian President Vladimir Putin could also cause more commotion in the markets.
“He could send less [gas], but he could also send more to certain destinations in the hope of dividing European countries,” said Thierry Bros, an energy market analyst who teaches at the Sciences Po school in Paris.
Europe will struggle to fill up stocks this summer if it does not receive 30 billion cubic meters of Russian gas, Bros said.
“Prices risk rising again,” he said.
Europe is better prepared than in January 2022, when storage was only at 54% capacity, Bros added.
Competition between Europe and Asia for imports of liquefied natural gas could also send prices higher, said Nicolas de Warren, president of the French association of industries that consume the most energy.