Gas prices on the Dutch TTF gas exchange are down nearly 10% this morning as the winter in Europe continues to be fairly mild this year, with the latest forecasts suggesting no more sustained cooling for the next few weeks.

With the current drop, the price has fallen back below €60 per megawatt-hour, and has already dropped by more than 80% compared to the €345 and €342 in the spring and autumn respectively.

In addition to the mild weather, European gas prices are also benefiting from the fact that Chinese storage facilities are full, which is prompting importers to divert February and March supplies to Europe. In addition, the high level of gas storage levels (around 80%) seen across Europe is also a cause for optimism, as this is much higher than the 50% level seen a year ago or the five-year seasonal average of 70%.

However, despite the mild weather and record levels of LNG shipments, difficulties remain, such as the lifting of strict Covid-restrictions in China, which could lead to a significant increase in the country's energy demand in the coming months.

In addition, according to the Financial Times, the Dutch government remains committed to closing the Groningen gas field by October, after it was already planned before the energy crisis began in 2021, following a significant increase in seismic activity in the area and the consequent increase in chances of earthquakes in recent years.