European Gas Prices Plummet 7.5%, but Market Cautious

Natural gas prices in Europe plummeted on Monday by 7.5%, dropping as low as 58 EUR/MWh, according to XTB.com.

The decline is attributed to a temporary de-escalation of fighting and reduced concerns about an immediate interruption of supplies from the Persian Gulf.

However, despite the short-term relief, market fundamentals remain cautious. The price drop brings gas in Europe back above 80% more expensive than before the conflict in February and over 100% higher compared to the beginning of the year.

European gas storage levels are at just ~55%, compared to a 5-year average of ~71%. Moreover, LNG imports have dropped by as much as 23% below the 5-year average.