Gas prices in Europe rose to €37/MWh in January

At the end of December 2025 and in early January of this year, European gas prices fluctuated between €28 and €29/MWh, but then rose sharply due to changes in market sentiment.

In the third week of January, TTF futures prices for the coming month rose amid expectations of falling temperatures and low European gas reserves. Additional pressure factors included disruptions to LNG exports from the US, geopolitical risks, particularly the situation in Iran, and expectations of higher demand in Asia due to the cold spell. In addition, traders rushed to close short positions based on forecasts of cold weather. In particular, on January 16, according to the ICE exchange, the price was almost €37/MWh. However, the cost of gas subsequently fell to around €35/MWh. Analysts point out that volatility is returning to the European gas market.

According to AGSI data, as of January 16, European gas storage facilities were 50.82% full (compared to 62.57% on the same date in 2025), and as of January 20, this figure was 49.12%. At the same time, the five-year average seasonal figure is around 67%.

Significant gas withdrawals have focused attention on the risks of stockpiling next summer, according to Bloomberg analysts. As the agency notes, Europe has lost much of its flexibility in absorbing supply shocks, leaving storage as one of the few buffers and purchasing LNG from around the world. However, stockpiling often depends on whether summer gas contracts will be cheaper than contracts for next winter.

This winter, Europe was able to attract significant maritime supplies, and Norwegian pipeline flows were relatively stable. However, falling temperatures are increasing demand for fuel, and forecasts of a major cold snap across most of the region in the last ten days of the month raise the question of whether price support will be needed to compete for cargoes with other buyers.

At the same time, the Institute for Energy Economics and Financial Analysis (IEEFA) warns that by limiting gas imports from Russia, the EU may become dependent on imports of American LNG.  In particular, supplies of the latter to the bloc have grown from 21 billion cubic meters in 2021 to approximately 81 billion cubic meters in 2025. Thus, EU countries received 57% of their LNG imports from the United States last year, and by 2030, this figure could increase to 75-80%. However, relations between the parties are currently tense.

Excessive dependence on American LNG, according to the study, contradicts the REPowerEU plan to strengthen the bloc’s energy security through diversification, demand reduction, and increased energy availability.

It should be noted that electricity prices in Europe fell in December, mainly due to seasonal factors. The price of day-ahead electricity in Ukraine in the last month of the year was €139.2/MWh, and the situation in the country’s energy system is deteriorating significantly due to Russian attacks.