European gas prices narrowly consolidated at the end of the year and plummeted 40% during the year, the biggest drop in three years

The Zhitong Finance App learned that European gas futures prices have fluctuated in a narrow range since the beginning of the month. Traders are weighing the impact of strong supply and cold weather, and prices are stabilizing. The price of natural gas is hovering around €28 per megawatt hour and is expected to fall by around 40% by the end of the year, which will be the biggest annual drop since 2023. Previously, due to lower fuel stocks than normal, the market once anticipated that winter would face serious challenges, but today's trend is in stark contrast to expectations. As of press release, Dutch natural gas futures for February delivery, the benchmark for European gas, rose 1.1% to 27.84 euros per megawatt hour.

The heating season started relatively moderately, Norway's gas supply was stable, and liquefied natural gas imports increased. Together, these factors have relieved the pressure on the market. They also show that the market has made great progress since the energy crisis four years ago. According to the International Energy Agency, European liquefied natural gas imports are expected to reach a record high this year.

On Wednesday before the New Year holidays, trading volume was relatively light. In terms of weather, temperature forecasts for mid-January have declined in parts of Europe. Models show that temperatures in northwestern Europe will continue to fall below normal levels. Natural gas stocks fell to 63%, and the five-year average seasonal inventory level was 74%. Electricity problems are still affecting gas delivery.