FX.co ★ Natural Gas Prices in Europe Remain Low

As December approached its midpoint, European natural gas prices continued their downward trend, nearing €27/MWh, the lowest point since April 2024. This decline extends the year's cumulative drop to approximately 45% and represents a reduction of over 90% from the peak levels reached during the 2022 energy crisis. The European gas market has been bolstered by record U.S. LNG exports and consistent supply from Norway, which have helped mitigate the impact of decreased Russian flows. As of this year, U.S. LNG shipments constitute about 56% of Europe's total LNG imports, facilitated by comparatively low demand in Asia. Concurrently, discussions led by the U.S. involving Ukraine and Russia have sparked optimism for a resolution to the three-year conflict, which could subsequently lead to a relaxation of EU sanctions on Russian energy. Additionally, milder-than-usual temperatures have diminished the need for heating, with forecasts suggesting slightly warmer conditions in the coming week. Nevertheless, as of December 7th, European gas storage levels were at 72% capacity, falling short of the European Commission's 90% target.