Europe's gas prices have reached pre-war levels as the new year begins under unusually warm temperatures that have tamed consumer demand and fended off the need to tap into underground storage.
Trading at the Dutch Title Transfer Facility (TTF), Europe's leading hub, closed on Wednesday at €65 per megawatt-hour (MWh) for deliveries scheduled for February.
The last time gas prices at the TTF fell below the €70 MWh threshold was 16 February, eight days before Russia launched the invasion of Ukraine, when they hit €69.5 MWh
Since the start of the war, the TTF has gone through extreme ups and downs, culminating in an all-time high of €342 MWh in late August. After that peak, gas prices entered a slow but steady path of stabilisation, even though they remain exceptionally elevated.
The downward trend offers a respite for European households and companies, which have for months struggled to cope with volatile and unpredictable energy bills.
The news comes as 2023 brings record-breaking winter temperatures across the continent, a phenomenon that experts said fits into the wider pattern of human-caused climate change.
Germany, Poland, Hungary, Denmark, the Netherlands, France and Switzerland are among the countries experiencing extraordinarily balmy weather, forcing some ski resorts to close down.
Residents of San Sebastián, in northern Spain, were this week photographed sunbathing by the beach, while the Czech Republic registered 19 degrees Celsius.
The atmospheric conditions have curbed heating use and protected emergency stocks.
Underground gas storage in the European Union, which is meant to cover the increase in demand during winter, is currently at 83% of total capacity.
"It's a fairly good position to be in at this time of the year," said a European Commission spokesperson on Wednesday.
"Due to the mild weather that we've experienced, there has been lower demand than in previous years. And those stocks have remained at a high level. I think that's had a calming effect on the market and reduced volatility and driven down prices."
Despite the respite, gas continues to be billed at abnormally high prices.
In January 2021, Europeans were paying over €17 MWh for their gas supplies, almost four times less costly than Wednesday's trading.
The European Commission has warned high energy prices have become a structural element of the European – and global – economy due to a persistent supply-demand mismatch that was triggered by the lifting of COVID-19 lockdowns and was later exacerbated by Russia's war in Ukraine.
This new normal has led the Commission and EU member states to heavily promote energy savings as the most powerful tool to control spiralling prices.
The bloc has established unprecedented plans to reduce gas and electricity consumption in a bid to re-balance supply and demand, together with a hard-fought cap on gas prices, which will be activated only when the TTF exceeds €180 MWh for three consecutive working days.
"Demand reduction is key here," Simone Tagliapietra, a senior fellow at Bruegel, a Brussels-based think tank, told Euronews.
Tagliapietra welcomed the recent drop in gas prices but stressed that Europe should have "no space for complacency" as a cold snap could arrive overnight and drive prices further up.
"It's about temperatures," the analyst said. "And storage not being used but actually refilled."