European gas prices have fallen back below €28 per megawatt hour, as markets look beyond the current cold snap towards milder weather, although storage levels remain well below average. In the United States, Henry Hub prices fell sharply from recent highs, as forecast temperatures eased concerns about more large withdrawals, notes Barbara Lambrecht, commodities analyst at Commerzbank.
European gas market remains calm after cold snap
“The gas market remains calm. Although European gas storage fill levels are around 10 percentage points below normal for this time of year, at just over 60%, and temperatures in Europe are currently well below normal, the European benchmark price, TTF, has fallen below €28 per megawatt hour again. Market participants will likely be looking forward to a more moderate temperature forecast after the current cold snap.”
“Similar developments can be observed across the Atlantic, where temperatures are also expected to be milder. Henry Hub prices, which rose to a three-year high of $5.5 per mmBtu just a month ago due to much higher-than-normal withdrawals from well-filled reserves in the wake of the initial cold snap, are now trading around $2 lower.”
