Reserves are melting

Gas already as expensive as last seen in fall 2023

Cold weather, low wind conditions and concerns about geopolitical developments are to blame for the current high prices.(Bild: APA/GEORG HOCHMUTH)

The price of European natural gas rose dramatically on Thursday, reaching its highest level since October 2023. The TTF price jumped to 55.06 euros per megawatt hour - an increase of more than 40 percent since December. 

The price has been trending upwards since mid-December. During this time, the price of the raw material has risen by more than 40 percent. The latest weather forecasts are being cited on the market as price drivers. According to these forecasts, temperatures in north-western Europe are likely to remain comparatively low in the coming days, which is likely to increase the demand for heating.

Low temperatures and little wind
Traders on the commodity markets are keeping a close eye on the weather. The low temperatures are also coinciding with low wind conditions, which is driving up gas consumption in Europe, with storage facilities emptying faster this winter than a year ago.

Gas reserves have been falling steadily since the beginning of the year. Gas storage facilities in Austria are currently 61% full - a year ago, they were 81% full at the beginning of February. German gas storage facilities are 52 percent full, compared to 74 percent a year ago.

What is the effect of Trump's tariffs?
In addition to the cold winter weather, market observers also explained the rise in gas prices with concerns about the consequences of the new US administration's tariff policy. Due to the tariffs, a trade conflict between the USA and China is looming, which could slow down the further development of the global economy.

Despite the recent increase, the price of European natural gas is still well below the level it reached in the early stages of the war in Ukraine. In the summer of 2022, prices rose to well over €300 at times.