Gas is cheapest from August 2021

The wholesale price of gas on the Rotterdam exchange, which is the market determinant for the European market, fell below 52 euros (1 230 CZK) per megawatt-hour (MWh) on Monday morning, the lowest since the end of August 2021, about six months before the start of the war in Ukraine.

At around 11:00 on Monday, one MWh of gas was selling for 51.9 euros at the Rotterdam’s Title Transfer Facility (TTF) virtual trading hub. Compared to Friday, this was a drop of more than 3.5 percent.

Moreover, gas was last at this price at the end of August 2021, quite a long way from the date (February 24, 2022) when Russia launched its military invasion of Ukraine, which further led to a deepening energy crisis in Europe and record energy prices on wholesale markets.

Gas has been getting cheaper on the market for several months. The trend of steadily falling prices, apart from a few daily fluctuations, started in December last year, when one MWh still cost EUR 140 (CZK 3 325), many times more.

Several factors contributed to the price fall. Outside temperatures have been favorable most of the time, despite the winter season, which has led to lower consumption and, thus, less pumping from filled underground storage tanks. Adequate supplies of liquefied natural gas (LNG) have also played a role.

For some time now, gas prices on the exchange have been below the ceiling set by the Czech government, which is CZK 3,050 (VAT included) per MWh. Some suppliers have already considered this in their price lists and are offering prices below the ceiling to existing and new customers.