European natural gas prices fell below €100 per megawatt hour (MWh) for the first time since Russia cut its exports over the summer in response to EU sanctions over its invasion of Ukraine.

Dutch TTF gas futures, the benchmark European contract, fell to 93.35 euros per MWh on Monday, the lowest since mid-June.

The price represents a drop of almost 20 percent from Friday’s prices and 70 percent lower than prices recorded in August, when they rose above €300/MWh.

Concerns about potential winter shortages were eased by mild temperatures and gas storage capacity reached more than 90 percent, helped by pipeline supplies from Russia.

The Nord Stream-1 gas pipeline is one of the main channels from Russia to Europe cut off indefinitely due to suspected sabotage. Russian gas now accounts for only 9% of EU supplies, down from 40% last year.

An image from an exploration report showing a gas leak from Nord Stream 1 near Sweden

(ImageSat International (ISI)/AFP)

Prices are also falling as more LNG “floating storage” becomes available. Over the weekend, it was reported that dozens of ships carrying LNG were unable to dock in Spain due to a lack of places to unload.

Commenting on the price drop, Energy Aspects’ James Waddell said prices are falling in the short-term due to “constrained storage capacity, low demand for gas due to mild weather and congestion in LNG (liquefied natural gas) supply and flow.” to the east in Europe.”

Despite the increase in gas supplies, the lower price is still well above the €20 to €40/MWh range that natural gas has largely traded in over the past 10 years.

Even so, the drop in prices will be a boost for EU leaders, who are working to cap natural gas prices amid rising inflation and sluggish economies in their countries.

Last week, the leaders of the EU member states met in Brussels, where they struggled to find immediate solutions to deal with the energy crisis.

“There is a lot of work ahead,” said Belgian Prime Minister Alexandre De Croix. “We are pushing into uncharted territory where we have no experience yet.”

After a day of talks on Thursday, the 27 EU leaders agreed to continue work in the coming weeks on ways to cap gas prices in the event of future price spikes.

Russian President Vladimir Putin said this last week Moscow was ready to resume gas supplies to Europe through the Nord Stream 2 gas pipeline.

Speaking at the Moscow Energy Forum, he said that European countries decide for themselves whether they want to resume supplies.

Putin said: “Russia is ready to start such deliveries. The ball is in the EU’s court. If they want, they can just turn on the faucet.”