European gas prices have fallen to their lowest levels since the start of the energy crisis, raising hopes of a strong economic recovery as energy pressures ease.Financial Times“British.

The TTF, the European price benchmark, was at 35.20 euros ($39.46) per megawatt-hour on Friday, a level last seen before Russia invaded Ukraine in July 2021 when it began squeezing energy supplies in Europe.

Later, the index rose slightly to end the week at 35.95 euros, roughly equivalent to 40.30 US dollars.

The TTF index rose above 340 euros ($381) per megawatt-hour last summer after Russia cut gas exports to Europe, fueling inflation and raising energy tariffs.

The fall to around 35 euros per megawatt hour reinforced the view that energy prices are returning to normal as Europe accelerates the deployment of renewable energy using alternative gas sources and takes advantage of a mild winter to fill up gas storage sites.

Brent crude oil prices also fell, after trading above $100 for much of the past year, to where they were trading before the Ukraine invasion.

Morgan Stanley analyst Martin Radz said Europe is now at 100 percent filling of gas storage facilities, which is critical to meeting winter demand even if Russian supplies drop to zero.

He noted that prices are now falling to slow the arrival of seaborne exports of liquefied natural gas, which Europe rushed last year to replace Russian flows.

“There is not enough room in storage capacity in Europe,” Rats said, adding that storage capacity was already at 60 percent capacity, compared with 35 percent at the end of last year’s winter.

And, “At some point, the flow of LNG will have to slow down to prevent stocks from overfilling.”

Declining energy costs helped calm inflation expectations, allowing central banks to cut the pace of interest rate hikes, with the European Central Bank raising interest rates by a quarter percent this week.

However, gas prices are still high compared to historical levels, with the average price in 2019 being less than €15, while the pre-crisis price peak was €29.17 in 2018, adjusted for inflation, just below where it is. Today’s trading price.

However, gas traders and analysts gathered at the annual FLAME conference in Amsterdam this week warned against complacency, saying Europe still faces potential challenges in the coming winter.

Commenting on this, Eurogas Secretary General James Watson said: “With a mild winter and reduced Chinese demand for LNG exports, we have passed the crisis.”

“We’re lucky,” said Watson, whose organization represents the wholesale and retail gas sectors in the EU.

In its last quarterly report on the gas market, the International Energy Agency pointed out that the balance of global gas supply and demand is “subject to an unusually wide range of uncertainties” this year, starting with and not ending with weather. The availability of liquefied natural gas is also likely to increase. Russian gas pipeline collapse to Europe.

The remaining Russian pipeline through Ukraine and Turkey now accounts for less than 10 percent of Europe’s gas imports, compared with 40 percent before the invasion, but traders believe cutting off imports from it could lead to further rises in prices.

Gas markets reflect some of these risks. TEF contracts for winter delivery are still trading above €50 per MWh and could rise further if the weather is milder than the winter that just ended, or if Asia becomes more competitive for natural gas.

“A lot more could happen,” a senior trader said on the sidelines of a conference in the Netherlands to discuss energy issues in Europe.

He noted that experts believe that 150 euros per megawatt hour could be reached, although hikes like those of last summer are unlikely.