Global Gas Prices Drop in Early April: Impact on Energy Markets

Global Gas Prices Drop in Early April: Impact on Energy Markets

In early April 2025, global gas prices sharply declined due to reduced demand after the heating season. Spot prices on the Dutch TTF exchange in Europe fell by $102 to $390/1000 m³. Meanwhile, Henry Hub prices in North America dropped to $136/1000 m³ on April 4, compared to $147/1000 m³ on March 31.

Factors Behind the Decline in Gas Prices

The drop in gas prices is driven by two key factors. First, the end of the heating season in both Europe and North America reduced demand. Second, falling oil prices played a role. Brent crude oil prices dropped from $74.6 per barrel on March 31 to $60.5 per barrel by April 9. This link between oil and gas prices is a significant factor in the decline.

Gas Storage and Price Stabilization

Despite the price drop, traders are transitioning into the stockpiling phase. On April 4, EU underground gas storage was 34.6% full, up 1% from the previous week. In the U.S., stocks increased by 820 million m³ to 50.2 billion m³. Although this is still 21.7% lower than last year, the stockpiling phase may help stabilize prices.

Impact on Industrial Sectors

Falling gas prices are expected to reduce the cost of greenhouse gas emission allowances. Lower natural gas prices typically lead to cheaper emission allowances. This could benefit industries like metallurgy. As GMK Center reported, European Emission Allowances (EUAs) fell to €68.7 per tonne on April 3, down from €70.83 per tonne in mid-March. The decline in EUAs signals reduced operational costs for industrial enterprises.

Conclusion

The recent drop in gas prices reflects a combination of seasonal factors, declining oil prices, and increased gas storage levels. This price correction could offer relief to industries reliant on natural gas, such as metallurgy. However, as traders enter the stockpiling phase, prices may stabilize in the near future. The long-term outlook for energy-intensive sectors looks more promising, especially with further declines in gas prices potentially lowering greenhouse gas emissions costs.