European natural gas prices dropped to their lowest level since May 2024 on Friday, as forecasts of milder weather and renewed geopolitical discussions combined to ease market tensions.

📉 Dutch TTF Natural Gas Futures—the benchmark for Europe’s gas trading—fell 2.5% to $35 (30.38 euros) per megawatt-hour in Amsterdam. For months, futures had hovered around $36.90 (32 euros), but the latest weather models predicting warmer conditions after the current cold snap in northwest Europe pushed prices lower.

🌍 Geopolitics added another layer of pressure. Traders are closely watching talks around a proposed U.S. peace plan for Ukraine, which could potentially ease sanctions on Russian energy exports. While far from certain, such a development would reshape Europe’s supply outlook. Ukrainian President Volodymyr Zelenskyy confirmed discussions are underway, noting that both sides are working to ensure the plan is “genuine,” though reports suggest it may involve significant concessions for Ukraine.

🗣️ Analysts are weighing the implications. Tom Marzec-Manser, director for European gas and LNG at Wood Mackenzie, told Bloomberg: “An end to the war could mean the banning of Russian pipe supply to the EU never happens, which would result in Europe being better supplied than previously expected.”

📦 Despite inventories falling below last year’s levels, Europe’s rising LNG imports are helping offset concerns about shortages. Still, as winter progresses, gas futures remain highly sensitive to weather patterns, geopolitical shifts, and potential supply shocks.

⚡ For now, consumers and industries benefit from softer prices. But the balance is fragile—any sudden cold spell or disruption in global energy flows could quickly reverse the trend.