European natural gas futures hovered around €32 to €33 per megawatt hour, near a nine-month low, as traders weighed potential regulatory changes and geopolitical developments against muted demand and ample inventories. Market focus centered on the European Commission's proposed adjustments to mandatory gas storage requirements ahead of the 2025 winter season.
TTF prices hold near nine-month lows
The new proposals aim to reduce the legal minimum storage threshold from the current 90% to between 82 and 83 billion cubic meters, equivalent to around 75%–76% of total capacity, in an effort to introduce more flexibility and reduce procurement pressure during low-demand periods. Germany, the bloc’s largest gas consumer, has already taken unilateral steps by lowering its own target from 90% to 80%, citing lower industrial demand and improved energy diversification. As of early May, EU-wide gas storage stood at 40.7%, with Germany lagging at 34.2%, raising some concerns about preparedness in the event of a supply disruption.
EU to unveil long-term roadmap
Meanwhile, the European Union is preparing to unveil a long-term roadmap aimed at cutting its remaining dependence on Russian gas. Although volumes have dropped significantly since the onset of the war in Ukraine, Russia still accounts for roughly 19% of the EU's natural gas supply, delivered primarily through the TurkStream pipeline and LNG shipments. Despite ongoing political efforts, existing long-term contracts with Russian suppliers remain exempt from sanctions, limiting the EU’s legal options for a complete exit. However, diplomatic developments could shift the balance. A potential U.S.-brokered peace deal in Ukraine, though still speculative, has raised hopes of de-escalating regional tensions, which could pave the way for a partial normalization of energy flows between Russia and Europe—though such a scenario remains politically sensitive and uncertain.
Near-term forecasts
In the near term, weather forecasts pointing to a spell of colder-than-average temperatures across northwest Europe are expected to push up heating demand, providing some support to prices. Still, structural shifts—including a steady increase in LNG imports, energy efficiency measures, and the accelerated rollout of renewables—continue to weigh on longer-term demand prospects for natural gas across the continent. The balance between short-term supply risks and long-term decarbonization goals will likely keep markets volatile heading into the second half of the year.
