Gas prices in Europe and the U.S. declined to the lows of last winter

There has been a significant fall in gas prices in Europe and the United States, which have reached the level of last winter.

Gas prices in Europe have almost halved since mid-December. On Friday, January 6, natural gas traded at 71 euro per megawatt hour. The fall was about 80% compared to the record highs of August 2022 at 346 euro per megawatt hour.

A similar fall in prices has been observed in the U.S. The cost of gas has declined by 50% since the end of November, thereby reaching $3.68 per million British thermal units (Mbtu). Last time this level was recorded in December 2021. 

Declining gas prices were driven by warm weather in Europe and the U.S. The favorable weather forecast let them balance gas reserves after an extremely cold period in December 2022.

But despite such a sharp fall in gas prices, they continue to exceed the European average level for the last ten years. Moreover, if China’s demand begins to increase or supply disruptions take place, prices might rise even higher.

Gas Infrastructure Europe data shows that gas storage facilities in Europe are currently 83% full. This is almost 15% higher than the average level for the last five years.