Prices for gas in Europe have fallen to a 16-month low, and supplies are stable

Large gas reserves in China have improved supply prospects. Suppliers are forced to ship LNG to Europe. Gas prices in Europe have reached their lowest level since September 2021.

Large reserves and low prices on the Chinese domestic market are forcing companies to reroute February and March shipments to Europe. That eases fears that accelerating economic growth will increase Chinese demand for gas and that LNG supplies from other countries will be redirected.

Last year, energy prices rose strongly, reaching record highs and damaging the economy. Now the gas markets are quieter. Inflation in Europe is starting to come down and there is some optimism that maybe the worst is over and fears of a recession are easing.

The main reason is long-term warming, but the temperature is expected to drop sharply this week. The cold snap will probably be short-term and will not affect gas reserves much. They are almost unchanged over the last month due to demand control and high LNG imports.