Europe enjoys temporary respite from high gas costs

More than anything else, weak Chinese gas demand is providing relief to EU consumers, but it is uncertain how long this relief will last

European gas buyers have enjoyed some respite over the last two months, with the front-month TTF gas price falling to its lowest level in almost a year, trading at €32–37/MWh ($385–444/1,000cm) during May. This marks a notable decline from above €55/MWh in early February, when the market tightened due to the end of Russian gas transit, a comparatively colder winter and weak output from Europe’s windfarms. Average front-month prices are now lower than they have been since late summer last year. Gas prices remain roughly double those considered the norm in the years preceding the COVID-19 pandemic and Russia’s invasion of Ukraine. “But if you correct for inflation, you are basically back to pr