The reduction in demand after the end of the heating season in Europe and North America contributed to the price correction. In Europe, spot natural gas quotes on the Dutch TTF exchange for the first decade of April fell by $102 to $390/1000 m3. This is evidenced by trading data.
In North America, offers on the American gas exchange Henry Hub as of April 4 decreased to $136/1000 m3 compared to $147/1000 m3, which was recorded on March 31.
At the same time, Asian spot prices JKM for liquefied natural gas remained unchanged at $430/1000 m3 from March 31 to April 4, according to data from the Tokyo Mercantile Exchange.
The fall in gas prices in the European and North American regions, in addition to the seasonal factor, was influenced by the decline in oil prices, because gas quotes are tied to them. From March 31 to April 9, Brent crude oil bids on the London ICE exchange fell from $74.6/barrel to $60.5/barrel.
At the same time, gas traders’ move to a stockpiling phase will keep prices from collapsing further. According to AGSI, underground gas storage facilities in the EU were 34.6% full as of April 4. This is 1% more than a week earlier.
US underground storage facilities increased by 820 million m3 over the same period to 50.2 billion m3, according to EIA. This is 21.7% less than as of April 4, 2024.
It is worth noting that in mid-March, the US Department of Energy increased its forecast for the average gas price at the Henry Hub in 2025 from the previous $136/1,000 m3 to $150/1,000 m3.
The fall in natural gas prices should lead to a decrease in the cost of greenhouse gas emission allowances, as they are correlated. This, in turn, will reduce the costs of industrial enterprises, primarily in the metallurgical sector.
As reported, European CO2 emission allowances (EUA) fell to €68.7/t by April 3, compared to €70.83/t on March 14. In total, the decrease in March was €1.87/t, and in the quarter – €4/t.
