Gas prices drop to the lowest point in more than 4 months

The price of a megawatt hour of gas fell to below 30 euros on Monday, January 14th, 2024. It is the first time since August that gas has been so cheap. The price is falling because stocks in Europe remain well stocked despite the cold.

During Monday afternoon trading, the megawatt hour price briefly touched below 29.40 euros, registering an 8 percent decrease from the closing price on Friday. The descent in gas prices commenced in October, contrasting with the approximately 55 euros per megawatt hour that traders had to shell out during that period.

The recent decrease is primarily attributed to the favorable condition of gas storage facilities in various European countries, with stocks averaging around 80 percent full. This robust supply situation suggests a promising outlook for successfully navigating the winter season.

A protracted period of low gas trading prices could potentially translate into savings on energy bills for consumers, although suppliers typically integrate such reductions into household rates with a certain delay.

The surge in gas prices witnessed throughout 2021 and particularly in 2022 was a consequence of Russia intermittently cutting off the supply. The pinnacle was reached in August 2022 when the megawatt hour price soared well above 300 euros, more than ten times the current rate.

This unprecedented escalation resulted in exorbitant energy bills, causing financial difficulties for many Dutch citizens. With the ability for European countries to secure gas from alternative sources, prices have substantially declined, alleviating the economic burden on consumers once again.

[Source: Nu.nl]