European natural gas benchmarks fell markedly on Monday as revised weather forecasts pointing to milder conditions eased market worries about strained supply. Traders pared positions that had driven prices higher the prior week, leading to a pronounced drop across both European and U.S. gas contracts.
Price moves
The European reference price, the Dutch TTF, declined 11.2% to 34.88 euros per megawatt-hour. In the United States, futures for March delivery fell 16.7% to $3.62 per million British thermal units. Those moves constituted a sharp reversal from the recent rally in gas markets.
Drivers behind the swings
Last week’s advance had been sparked primarily by a large winter storm in the United States. The storm raised heating demand domestically and disrupted pipeline deliveries that serve liquefied natural gas export facilities, tightening flows available for shipment. At the same time, persistent cold in parts of Europe and Asia was supporting stronger consumption in those regions, reinforcing upward pressure on prices.
With weather models now indicating milder conditions, immediate concerns about near-term heating demand have eased and the perceived risk to supply has diminished. That rebalancing of expectations prompted the rapid retreat in both the Dutch TTF benchmark and U.S. futures.
Market context and implications
The recent volatility illustrates how weather-driven demand swings and logistical disruptions to pipeline deliveries and LNG export logistics can quickly shift market sentiment. When cold weather boosts consumption across key consuming regions, prices can move sharply higher; conversely, an easing in weather-related demand expectations can produce an equally swift decline.
Note: The information in this report is drawn from market movements and reported price levels and reflects the state of trading and weather-related market drivers described above.