In Europe, purchase prices for gas fell to the lowest level since February 24

Purchase prices for natural gas in Europe have fallen to the lowest level since the Russian invasion of Ukraine.

This is reported by Le Figaro.

On the TTF, gas purchase prices for February fell by 4.67% to around €73. This price is almost five times lower than in August 2022 (down to €342 per megawatt hour) and the lowest since February 21, 2022.

The biggest drop in the price occurred during December, as a warm winter allowed countries to use less gas from stockpiles they had built up in anticipation of a cut in supplies from Russia. It was the Kremlin that was the main supplier of gas at that time.

In the last days of December, the gas futures contract in Europe one month ahead fluctuated between €76 and €83 per megawatt-hour.

Lower gas prices mean lower electricity prices as well, as many power plants in Europe produce it from gas. Thus, in France, the purchase price in August exceeded €1,000 per megawatt-hour, and in the last days of December it was already €240.

However, the decrease in the purchase price will not necessarily be noticeable to the end user, because the service providers are hedging themselves in case of another price increase.

• In September, Russian Gazprom announced the suspension of gas supplies through the Nord Stream pipeline, which is the main gas pipeline for supplies to the EU. Due to this, gas prices in the EU have increased significantly. Later, supplies were restored, but Russia already significantly reduced supplies to Europe, in particular, completely stopped doing it through Ukraine.
• Against this background, the European Union began to develop a mechanism for limiting the price of Russian gas.