European natural gas price at its lowest level since July 2023 - experts explain the background

European natural gas price at its lowest level since July 2023 - experts explain the background

According to a report by www.berliner-zeitung.de, the European price for natural gas is lower than it has been since July 2023. The TTF futures contract for delivery in one month on the Amsterdam stock exchange showed a value of 26 euros per megawatt hour, which is the lowest level in over half a year. This decline is explained, among other things, by the weak economy in the EU, which is also slowing gas demand in Germany.

Natural gas storage facilities in Germany are well filled, which could also have an impact on the price. According to the latest information from the Federal Network Agency, Germany saved a lot of gas at the end of 2023, and the total filling level of natural gas storage facilities was 72.59 percent on Saturday, which remains comparatively high. The attacks by Houthi rebels on ships in the Red Sea have not recently been able to give the price of gas a major boost, and experts assume that this will not affect supplies in Europe.

The price level is also well below the highs reached during the Russian war against Ukraine. Over the course of 2022, more than 300 euros per megawatt hour were temporarily due after Russia sharply cut back on its gas deliveries to Europe.

This development could have important implications for the market. A low gas price can have a positive impact on consumers and production by reducing energy costs. However, this could affect the profitability of gas companies and investments in renewable energy. In addition, the development of gas prices could have further geopolitical implications, particularly with regard to relations between Russia and the EU.

Overall, the low gas price could have a mix of positive and negative impacts that should be carefully monitored as it creates both opportunities and risks for various stakeholders in the financial industry.