Gas prices in Europe fell to June lows amid of LNG supply growth

European gas prices hit record lows since June 14. The decline in price is linked to heavily increased volumes of LNG imports and larger than usual inventories, with both factors reducing concerns over supply.

Futures went down by 7.5% below a level of 100 euros per megawatt-hour for the first time in more than a month. Meanwhile, temperatures in most European countries are still mild, thus contributing to further price drops. Gas usage is also reduced by increased volumes of wind-generated energy.

As it was stated by Tom Marzec-Manser, head of gas analytics at ICIS in London, mild and windy weather forecasted for the upcoming half a month combined with a traditional decrease in demand on Christmas are the major “bearish” factors for the prices.

According to specialists’ estimates, next week the weather in European countries will get closer to climate normal typical for winter. At the same time, as noted by analysts at trading firm Energi Danmark A/S, chances for a warm January might be increasing.

As it was shown by data from Gas Infrastructure Europe, gas inventories in Europe are filled by 83%, which is more than the five-year seasonal average. Meanwhile, Russian supplies remained stable on Wednesday.