The weather has been with Europe this winter, so the price of natural gas fell below 50 euros per megawatt-hour on Thursday for the first time in 17 months, as fears of an energy crisis in the region eased, Bloomberg reported. In September, Russian President Vladimir Putin threatened to cut off energy supplies if price caps were imposed on Russian oil and gas exports, warning the West that it would “shiver from the cold in winter and freeze its tail” like a wolf from a Russian fairy tale. a fairy tale, reports Reuters.

Prices have fallen by more than 80% from their peak in August, when a cut in Russian gas supplies cost Europe roughly one trillion dollars, affecting the region’s economy and fueling high inflation, Agerpres writes.

Now that Europe is recovering, mild weather has reduced demand for heating, and the continent has been importing liquefied natural gas (LNG) to compensate for a cut in gas supplies from Russia. Stocks are now at a much higher level than usual at this time of year.

At the TTF gas hub in Amsterdam, where benchmark prices are set in Europe, natural gas futures for delivery next month fell 4.8% to 49.50 euros per megawatt hour, the lowest one-day low since September 2021. This year the price is down about 35%, but still double the normal level for this time of year.

With the onset of cold weather, prices may rise

Analysts warn that prices could rise if the weather turns significantly colder or if there are supply disruptions. Competition with Asia for liquefied natural gas can create risks.

Analysts believe that Europe will have to fill storage with less gas from Russia than last summer.

Consistent supplies of liquefied gases and a high degree of filling of gas fields give Europe the necessary confidence that it will survive the rest of the winter without problems with energy supply.

Gas prices are falling, easing some fears about inflation and the European economy.

In September, Vladimir Putin said that European calls to cap the price of Russian gas were “stupid” and would lead to higher global prices and economic problems in Europe, threatening to cut off gas to Europe if the cap was imposed.

In December, the EU approved a mechanism that allows limiting the price of natural gas from 180 euros. (Photo source: Dreamstime)