Since the beginning of 2024, natural gas prices in Europe have experienced a significant decline, marking a substantial relief for energy-intensive industries. However, the underlying factors driving this trend have sparked widespread discussion in the market.
First, Europe's natural gas reserves reached historic highs before the past winter. This was largely due to proactive government procurement of liquefied natural gas (LNG) to replace supplies from Russia. Additionally, an unusually mild winter reduced energy demand from households and industries.
The unusually mild winter has also reduced energy demand for households and industries. (Image: Pexels)
However, market analysts warn that the current drop in energy prices might be temporary. Europe's increasing reliance on LNG imports makes it more susceptible to price volatility in international markets. Furthermore, with China's economic recovery underway, global energy demand may rise again, potentially driving up natural gas prices.
Experts suggest that the European Union should accelerate the development and adoption of renewable energy sources to reduce dependency on imported energy and ensure long-term energy security.
