Natural gas prices in Europe have fallen to their lowest level since May 2024. The market received two signals welcomed by investors: improved weather forecasts and a statement from Volodymyr Zelenskiy regarding his willingness to work on a peace plan suggested by the US and Russia. Both factors have reduced the risk premium, which had been supporting gas prices for months.

Amsterdam-traded TTF futures dropped by 3.1%, down to €30.20 per megawatt-hour. For a market accustomed to surviving under the pressures of geopolitics and unpredictable consumption forecasts, this level feels almost comfortable.

Although the share of Russian gas in European imports is currently just above 10%, even the hint of a potential influx of additional energy supplies is already putting pressure on prices. The market, which has been kept on high alert by shortages for years, reacts promptly even to the theoretical possibility of easing restrictions.

The second factor contributing to the slide in gas prices is the mild weather. Updated forecasts for Northwestern Europe at the end of November and early December predict temperatures around or above normal levels. This alleviates concerns about a spike in consumption, although traders are still hesitant to relax — short-term forecasts have become too volatile in recent years to be trusted blindly.

Meanwhile, the situation with inventory remains tense. Following the recent cold snap, withdrawals from underground storage have accelerated, and the fill level has dropped below 81%. This is still comfortable by historical standards, but the market prefers to remember that winter is just beginning.

As a result, gas prices have decreased, but this has not instilled confidence: forecasts are mild, geopolitics are stern, and storage levels are simply statistics that can easily change in one cold week.