Due to favorable weather forecasts, gas prices fell by more than €5 this week. Compared to the wild market of 2022, the gas price remains relatively stable. Due to the high European filling level, the effects of both higher and lower temperatures remain relatively limited. In addition, the second largest LNG processor in the United States came one step closer to reopening.
The gas price is currently very stable. On Wednesday, February 1, the gas price was still €59,53. A week later the gas price was about €6 lower. On Wednesday, February 8, the gas price reached the lowest level of the week. At the time of writing (Wednesday, February 8), the gas price reached the lowest level since September 6, 2021, at €53,47.
Now that the cold period is coming to an end, it is clear that the gas price has hardly been influenced by the lower temperatures. The low temperatures of recent weeks have hardly created any upward pressure. When it got colder in mid-January, the gas price briefly approached €67, but the TTF quickly found its way back down. In fact, within a week the gas price dropped to €54,81. Since then, the gas price has not exceeded €60 at any time.
The higher temperatures predicted by Europe's weather institutes also have only limited impact on gas prices. On the TTF, the gas price fell by only €6 this week. It is not surprising that the gas price responds less strongly to changing weather forecasts than in the autumn of 2022. European gas supplies are still much fuller than usual. Normally, gas reserves are 56% full at this time of year. The average European filling rate is currently around 69%.
Freeport is taking new steps
Meanwhile, Freeport-LNG, the United States' second-largest LNG export facility, took another step toward reopening last week. Due to a fire, the export facility had to close its doors in June 2022. At the end of January, Freeport announced that it would resume exports. The restart is not yet quick. On Thursday, January 26, Freeport received permission from the authorities to test the safety of the gas pipeline. On Friday, February 3, a further step was taken and Freeport was given the green light to convert a limited amount of gas into LNG. Freeport is currently waiting until they can allow LNG to flow onto the ships again. It is not yet known when Freeport will be able to supply ships with LNG again. According to analysts, exports cannot resume until March at the earliest.
The opening of the terminal would significantly increase the international availability of LNG. When Freeport returns to full capacity, the facility could convert about 2% of all U.S. gas production into LNG. This is good news for the member states of the European Union. According to analysts, Europe still needs to increase LNG imports to fill European gas storages to 100% again.