The European gas price (TTF) has recently decreased to around EUR40 per MWh. According to Commerzbank’s commodity analyst, various economic concerns and an improved supply situation have contributed to this reduction.
Bloomberg reports that LNG imports in March were the highest for that month since 2017, easing worries about current low gas storage levels. As of 30 March, European gas storage facilities were reported to be 34% full, below the 5-year average of 45%.
Current Market Pricing Dynamics
Currently, gas prices are approximately double those of last year, which may have boosted import levels. This elevation in prices is necessary to ensure that producers remain inclined to supply significant quantities of LNG to Europe.
This recent adjustment in gas prices, particularly the drop to roughly EUR40 per MWh, reflects a market responding to both supply shifts and broader economic signals. Though on face value it may seem a welcome relief from the price volatility experienced last year, the underlying factors tell a more detailed story.
Analyst Sperber attributes much of this movement to improved import figures and pipeline stability. March saw LNG volumes hitting their highest since 2017 for that month. That’s not just a statistical curiosity – it’s reassuring considering the relatively low levels of gas stored across the region. As of late March, stocks stood at 34%, well under the seasonal 5-year norm of 45%. That shortfall matters. Storage levels are like a cushion—when they’re thin, any supply disruption or late-season cold spell can cause quick price jumps.
We’ve seen before how quickly sentiment can turn when European infrastructure runs lean. The fact that prices remain about twice as high as they were this time last year shouldn’t be viewed as bullish by default. This twofold price level plays a functional role: it keeps European demand attractive for LNG exporters, especially from North America and parts of Asia. Without that price incentive, cargoes can and do divert elsewhere.
Outlook For Summer Contracts
That sets up an interesting few weeks ahead. The futures curve still signals some hesitancy about long-term stability, with prompt contracts pulling back while later-dated strips remain relatively firm. If storage refill rates lag through April and early May, traders should prepare for more pronounced risk premiums to emerge in the summer contracts. Historical patterns suggest market participants often underprice the consequences of tight restocking windows.
From our end, the price descent offers clarity but not comfort. The recent high import volumes suggest that buyers are still in a heightened state of vigilance, actively replenishing reserves well ahead of the heavier demand period. We read that as preparatory behaviour rather than a sign of easing nerves. For contracts with summer exposure, watch for anomalies in near-term delivery availability, especially into core hubs in Northern and Western Europe.
Sperber highlights economic headwinds, too. Slower industrial demand in Germany, and weaker-than-expected factory activity in France and Italy, reduce base-load gas burn. That adds a layer of softness to spot prices. But such softness is conditional. Should industrial sentiment recover or weather patterns shift unexpectedly—both of which have upended forecasts in recent years—the balancing point could look quite different.
With prompt values settling near EUR40, trigger levels for optionality are coming into sharper focus. We should expect recalibration in strike selection strategies and a reevaluation of delta exposure as volatility metrics stabilise heading into Q2. Risk management models can lean on these recent volume and storage data points to fine-tune coverage, especially for traders with open summer-winter spreads.
As we view it, the real takeaway lies in not taking the current price drop at face value. These aren’t calm waters—they’re simply waters into which more vessels are presently arriving. The actions taken now—around positioning, securing floor levels, and reassessing counterparty strategy—will reverberate well into the next storage cycle.
