The European gas price seems to be returning to the level of early January 2022 at the end of a turbulent year. The fuel price fell for the seventh day on Tuesday due to the unusually mild winter weather in large parts of Europe.
Due to the warmer weather, gas consumption for heating is decreasing, and gas supplies are maintained. The industry also traditionally uses less gas during the holidays.
The gas price, which had already started to rise sharply from October 2021 due to lower deliveries to Europe by Russia, showed significant fluctuations this year. After a decline in December last year, the gas price shot up in February due to the Russian invasion of Ukraine. The threat of sanctions from the West against Moscow and threats from Russia to cut off the gas supply unnerved the market.
In the following months, the gas price seemed to stabilize somewhat due to the warm spring weather and because the Russian state gas group Gazprom continued to supply gas to Europe. From mid-June, however, gas prices shot up again. That came as Gazprom warned technical problems could cut supplies through a key gas pipeline to Germany by 40 percent.
From that moment on, Gazprom began to supply less and less gas to various European countries, and the Russian gas tap was almost completely turned off. Europe then accused Moscow of using gas supplies as a weapon. In the summer months, the gas price rose steadily to around 350 euros per megawatt hour in August. This was due to concerns that European countries would be unable to replenish their gas supplies in time for the winter due to the loss of Russian supplies.
More and more European countries started importing liquefied natural gas (LNG) to meet shortages of natural gas. Because of this and thanks to the mild autumn weather, Europe could fill the gas storage. Gas prices may also fall further as mild winter weather is expected to last into the first week of January.
