Prices in Europe have fallen below $800 per thousand cubic meters

The cost of gas in Europe on the first working day of the new year was below $800 per thousand cubic meters, being at February levels. 

In particular, February futures on the TTF index (Europe's largest hub) opened trading at $777.3 per thousand cubic meters (-8%). On Friday, the last trading day of 2022, gas quotes were at $844.3 per thousand cubic meters. Prices dropped below $800 on December 30, for the first time in 10 months.

Recall that the EU countries agreed on December 19 to establish a maximum exchange price for gas. It will amount to 180 euros per MWh (almost $2,000 per thousand cubic meters at the current exchange rate) and will be effective from February 15. This measure is aimed at protecting European households and businesses from price spikes for «blue fuel». 

Gas prices in Europe increased significantly in 2021. In the spring of 2021, gas quotes for TTF fluctuated in the range of $ 250-300 per thousand cubic meters, at the end of summer prices exceeded $600, and in the fall – already $1000. In the winter of 2022, prices crossed the threshold of $2,000, and in early spring (due to fears of a ban on the import of Russian energy resources) reached a record high of $3,892 per thousand cubic meters.

Despite the local decline, gas prices today are several times higher than the average over the long-term history of observations. Analysts note that such persistently high prices have not been in the entire history of the operation of gas hubs in Europe – since 1996.