European natural gas prices crash to pre-Ukraine war levels, US slumps 10%
Quantum Commodity Intelligence - European natural gas prices Wednesday sunk to the lowest levels since February as mild winter temperatures, seasonally low demand, and abundant supplies contributed to gas benchmarks retreating to levels not seen since before Russia invaded Ukraine.
TTF prices for front month Jan23 slumped to a low of €76.18/MWh early in the session, versus the previous settlement of €80.043/MWh, although they rebounded to close at €81.35/MWh.
European prices initially spiked to over €200/MWh in March after Russia invaded its neighbour but settled down as Russian gas flows continued.
But prices surged in the summer amid continuous disruptions to Russian supplies into Europe and an explosion at the US Freeport LNG terminal, peaking at a record €350/MWh at the end of August and prompting Europe to introduce emergency measures to boost imports and preserve supplies for winter.
TTF prices have largely been in decline ever since, but values spiked briefly above €150/MWh less than three weeks ago with the onset of winter.
However, the rally proved short-lived as Europe comfortably passed the first cold-weather test of winter, cushioned by bulging inventories and record LNG imports.
European inventory levels reached over 95% in November and according to Gas Infrastructure Europe, gas storage facilities across the EU were 83.2% full as of 28 Dec.
The current level is 30% above the same period last year, when Europe had unusually low levels of storage and about 10% over the five-year average, while conservation measures have slashed normal winter demand levels.
Meanwhile, UK Jan23 NBP natural gas futures dropped more than 5% on the day to settle below 190 pence per therm (p/th) for the first time since February, hitting a low of 182.25 p/th.
US natural gas prices also crashed to 10-month lows amid forecasts for warmer weather following Storm Elliot, with the front-month Jan23 Henry Hub contract on NYMEX around 10% lower late afternoon eastern time, trading at $4.75/mmBtu. The more-liquid Feb23 contract was around 8% lower at $4.71/mmBtu
Domestic prices also came under pressure amid a further delay announced to the resumption of exports from the Freeport LNG terminal until a least January.
