The second quarterly review of key developments in gas wholesale markets highlights the main trends in the first half of 2024 and identifies upcoming challenges for Europe arising from global developments (flows via Ukraine, global LNG markets etc.).

The report finds volatile prices and supply changes in European gas markets in the first half of 2024:

• Gas prices: at the end of Q1, European gas wholesale prices fell to levels not seen since before the energy crisis but increased in Q2 as markets re-focused on supply risks, including a tighter global Liquefied Natural Gas (LNG) market. High gas storage levels and continued low consumption in the EU limited further price increases. The average TTF price was 33% lower in the first half of the year compared to the same period in 2023.

• Price integration: price differences among EU gas trading hubs indicated no critical network congestion in Europe’s gas market in the first half of 2024. Hub price spreads have significantly declined since 2022 when changes in gas flow direction caused congestion and price gaps. However, price integration has not yet returned to pre-crisis levels, in part due to increased transportation costs.

• Pipeline and LNG supply: gas pipeline supply to the EU was stable, despite some unplanned outages temporarily restricting Norwegian supply and causing price volatility. LNG remained a crucial element of the supply portfolio, but imports declined significantly in Q2 2024 compared to the same period in 2023. Outages at LNG production facilities and higher demand outside Europe tightened global LNG markets, reducing the incentive to import spot cargoes to Europe.

• Gas demand: in the first half of 2024, gas-fired power generation in the EU fell by 16% compared to the same period last year. Higher renewable energy output reduced the need for gas and coal plants, which cut carbon emissions and eased the EU gas supply-demand balance. Industrial gas use rose slightly but remained well below pre-crisis levels. Energy conservation and warmer-than-usual temperatures in Q1 (period with the highest heating demand) kept household gas consumption low.

• Gas storage: In Q2 2024, the EU injected 41 TWh less gas into storage compared to Q2 2023. Despite the slower rate, storages are on course (77.5% at the end of the second quarter, one of the highest levels in the past five summers) to reach the mandated filling level of 90% by 1 November.