Gas falls for eighth week to bring price down 66% this year

The price of under €25 for wholesale gas is down from €30 in the past week, and means European natural gas prices have completed their longest run of weekly declines since 2007. Picture: iStock

The price of European wholesale gas fell again in late trade today, pointing the way to significant cuts in the coming months for utility bills for households and businesses, if the price cuts are passed on.

The price of gas for delivery in June fell below €25 per megawatt hour, completing a huge slide this week in the key benchmark prices for gas used to power large amounts of electricity on the all-Ireland grid.

The price of under €25 for wholesale gas is down from €30 in the past week, and means European natural gas prices have completed their longest run of weekly declines since 2007.

They have now declined for an eighth consecutive week, and extending this year’s slump to more than 66%.

Prices had spiked as high as €306 per megawatt hour last summer amid fears that Europe would run out of its key gas supplies that power and heat homes and run industries, following the ending of supplies from Russia.

Since then, Europe bolstered its gas storage reserves over the winter by record levels, helped by imports of large amounts of liquified natural gas, or LNG supplies from the US.

Prices have tumbled further in recent weeks with demand proving stubborn to return as the eurozone-wide economy showed few signs of a meaningful recovery.

Recession in Germany 

Germany suffered its first recession since the start ofthe pandemic, extinguishing hopes that Europe’s top economy could escape such a fate after the war in Ukraine sent energy prices soaring, figures posted this week showed.

First-quarter output shrank 0.3% from the previous three months following a 0.5% drop between October and December, the German statistics office said.

However, the price of European wholesale gas for delivery in December was still trading at the relatively elevated level of €44.85 in yesterday’s trade, according to futures markets.

There are growing concerns that plentiful shipments of LNG supplies to Europe may come to an end this winter. The price of LNG gas futures in Asia were trading at the highest premium to European prices since the start of the year.

Though Europe averted a severe gas shortage last winter, the discount to Asia for its cargoes could worsen the region’s still-fragile supply situation in the wake of Russia’s invasion of Ukraine.

• Additional reporting by Bloomberg