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The premium of natural gas for delivery in Europe this summer over the futures prices for next winter has plunged in recent days amid milder temperatures and talks on ending the war in Ukraine.
Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, slumped by 3.7% for the front-month contract for March as of 12:30 p.m. in Amsterdam on Wednesday.
More importantly, the premium of natural gas for delivery in the summer months of 2025 compared to the winter 2025/2026 futures has been steadily falling this week and is nearing zero.
That’s good news for European policymakers and industries.
Typically, the prices for the winter months are higher than those in the summer. But since the beginning of 2025, colder temperatures and fast-depleting European gas stocks have pushed up summer futures as Europe will now need to buy much more gas to refill storage during the summer.
The first proper winter in Europe with prolonged periods of cold snaps since the 2022 energy crisis is depleting the EU stockpiles of natural gas, which have dropped to the lowest level since the crisis for this time of the year.
Adding to the predicament has been the natural gas summer premium compared to winter-time prices. The premium makes stockpiling in the summer uneconomical. Utilities and market operators in several key European economies, including Germany, have called for government support to help replenish natural gas stockpiles ahead of the 2025/2026 winter.
As of February 24, gas storage levels across the EU were 40% full, per data from Gas Infrastructure Europe. That’s much lower than about 60% full storage capacity at the same time last year.
Separately, other companies and EU countries have been pushing for easing of the refill targets for 2025/2026 to avoid a spike in gas prices.
In recent days, however, milder weather in northwest Europe has slowed inventory drawdowns while discussions about peace in Ukraine have also depressed commodity prices.
