The gas price is currently slightly lower. The high filling rate and lower demand (particularly from industry) are putting pressure on the gas price. Whether it will remain this way remains to be seen, because lower temperatures are expected in Northern Europe.
The gas price has fallen this week. On Wednesday, November 15, the TTF was still at €47,04 per megawatt hour. On Tuesday, November 21, the gas price was at the lowest point of the week at €44,90.
Lower demand remains one of the main causes of the low gas price. On average, European gas demand appears to be 25% lower than in 2023. It is striking that the lower gas price barely results in higher demand. Last year, the gas price was more than 3,5 times higher, but consumption was approximately the same. It appears that the weak European economy is causing higher gas prices. Since the war in Ukraine, industrial activity has been steadily declining. The most recent European PMI was 43. A PMI below 50 indicates contraction.
In addition, the market responded to a new forecast from Goldman Sachs. The investment bank has revised downwards its forecast for the price of European gas, Bloomberg reports. However, the investment bank also issues a warning: if there are setbacks in supply or if it gets cold, the gas price could easily double.
Cold weather coming
Even in the short term, a higher gas price does not seem to be an unrealistic scenario. It looks like temperatures in Northern Europe will drop in the coming weeks. It is therefore obvious that the demand for gas for heating will increase. According to various media, temperatures are falling below the seasonal average. Lower temperatures are expected, especially in Germany. Temperatures of -2,5 degrees are expected in Berlin. This puts extra pressure on the gas market, since buildings in Germany, just like in the Netherlands, are predominantly heated with gas.
The fact that the forecasts have little traction on the gas market appears to be mainly due to the high filling rate. About two weeks ago, European gas reserves were filled to record volumes. On November 7, the filling level was at its peak, at 99,8%. Gas is now being withdrawn from the reserves. According to the latest data from the Dutch Gas Union, this has fallen to 98,6%. It is not only low temperatures that ensure that little gas is withdrawn from supplies. Due to the high wind force, only 25% to 30% of Dutch electricity was generated with gas in most weeks of autumn.