European gas prices plunged to their lowest levels since mid-2021, thereby providing the continent with much-needed relief following the decision to reduce dependency on Russian imports after Russia’s invasion of Ukraine.
Gas futures have plunged by two-thirds this year, with Benchmark Dutch futures below €25 per megawatt hour—its lowest level since May 2021- after falling for eight consecutive weeks.
Data from Gas Infrastructure Europe indicated that European gas reserves are approximately 67% full, notably exceeding a five-year average of around 50%. Reserve levels have been significantly aided by increased imports of liquefied natural gas.
Georg Zachmann, a senior fellow at Brussels-based think tank Bruegel, hailed the drop in gas prices as a much-needed change. He claimed that this development “is excellent news for Europe and shows that increased LNG imports as well as demand reduction managed to swiftly rebalance the European market after Russia closed the taps.”
Europe’s economic outlook appears to be increasingly optimistic, with economic data scheduled to be released later in the week. The report is expected to show a drop in inflation, with energy prices in decline across the eurozone.