There has been a substantial decline in the wholesale gas price for the European market. On Monday, the price fell below 30 euros (approximately 740 CZK) per megawatt-hour (MWh), the lowest in almost five months. Analysts attribute this to a relatively high supply after numerous countries replaced Russian deliveries with increased imports of liquefied natural gas from other nations in recent months.
The price of the crucial futures contract for gas with delivery in the coming month at the virtual trading node Title Transfer Facility (TTF) in the Netherlands also decreased by approximately eight percent to 29.29 euros on Monday. At the beginning of 2023, the megawatt-hour traded at 79 euros.
The start of the war in the Middle East led to a temporary price increase above 50 euros at the beginning of October, but the trend has since reversed. The current price level is significantly below the peaks reached after the start of the Russian war against Ukraine. In 2022, gas prices temporarily exceeded 300 euros after Russia significantly reduced gas supplies to Europe.
Notably, last year, the Czechs consumed the least amount of gas since 1994. Natural gas consumption in the Czech Republic fell seven percent yearly to 7.1 billion cubic meters. Even across the European Union, gas consumption decreased by approximately five percent in 2023.
In conclusion, the shift in the gas market presents a new dynamic in energy trading. As countries diversify their supply sources and reduce their reliance on Russian gas, it will be interesting to see how this affects the energy market in the long term.