The price of natural gas fell to a record low on the Dutch stock exchange, whose prices are a reference for trade in Europe, Reuters reported.
The price of June gas on the Amsterdam Bosa reached €24.90 per megawatt hour (MWh) in the morning – the lowest level since May 27, 2021.
In August 2022, it peaked at around €340/MWh amid the European energy crisis triggered by an 80% cut in Russian supplies at a time when Gazprom was the EU’s main supplier of the blue fuel.
The crisis caused gas and electricity prices to skyrocket last year, burdening consumers and some businesses with very high energy bills. This has led to production restrictions in some sectors such as glass, which mainly use natural gas.
European wholesale gas prices have fallen this year due to a milder winter, measures to cut gas consumption and high stock levels the EU has put in place to avoid shortages.
On Thursday, the European Commission announced that the EU is no longer dependent on Russian energy supplies, having been able to quickly find alternative producers (mainly of liquefied natural gas), realize consumption savings and accelerate the introduction of clean energy sources.
Brussels announced that the EU is no longer dependent on Russia for energy
According to an analysis by the European Commission, Bulgaria has also done well, replacing stopped Russian imports with liquefied gas, opening new connections and adding 0.5 gigawatts of additional clean energy capacity. Sofia has also done better than the European average in reducing consumption, reducing it by 22% compared to 2021.
Gas consumption in Europe between August 2022 and March 2023 was 17% lower than the average for the same period in the previous five years.
Analysts say Europe will survive another winter without significant shocks if it exercises caution.
“We think Germany and the wider region could experience gas shortages next winter if demand does not fall by another 15%,” Reuters quoted experts as saying.
Thursday’s news that Germany’s economy, Europe’s largest, had slipped into recession also contributed to further declines in natural gas prices, traders said.
Drops in wholesale energy prices often take several months to translate into lower retail energy bills.
Benchmark British wholesale gas prices have almost halved since the start of the year, allowing the country’s energy market regulator Ofgem to cut the cap on household energy bills by almost 40% since July.
However, the energy cut for most British households will be around 17%, as they are protected by a government guarantee from October to maintain average energy costs of $3,155 a year.