Gas price: Ukraine and Europe. Market overview February 24 – 28, 2025

Ukrainian Energy Exchange

Last week, trading in February and March 2025 continued. In total, 11 companies formed positions for the purchase and sale of natural gas: D.Trading, GTS Operator of Ukraine, Ukrzaliznytsia, Nadra-Geoinvest, Ukrnafta, Ukrnaftoburinnya, GSC Oil and Gas Trading, Kyivvodokanal, Energo Zbut Trans, Ukrtransgaz, etc.

The starting prices of resources stabilized during the week. As a result, as of Friday, the average starting price of March resources in the GTS was 3.72% higher than on Monday.

Last week, both sell and buy positions were sold. In total, 33,940.00 thousand cubic meters of natural gas were sold.

Of this amount, 32.2 million cubic meters were purchased by Ukrtransgaz in a separate section “Purchases of imported natural gas”. The volume purchased at the auction is to be delivered to the UGS facilities during March and the first half of April. The prices of the sold items were in the range of UAH 26307-26384 per thousand cubic meters, excluding VAT. In addition, the positions of Ukrnafta, Energo Zbut Trans, and Kyivvodokanal were successful and formed the following quoted prices:

Quoted prices in the section “Natural gas: medium and long-term market”

On the short-term natural gas market of the UEEX, participants formed bids in the GTS and UGS. Last week, compared to the previous period, there were diverse price movements and stable trading activity. On Friday, February 28, the weighted average price of the CPO amounted to UAH 17010, excluding VAT.

European market

Last week, gas prices experienced a significant downward momentum. News from the European Commission regarding the revision of gas storage replenishment targets, potentially offering even more flexibility to previously published values, added additional bearish pressure to gas markets. The possibility of signing a long-awaited peace agreement on the russian-Ukrainian war and that sanctions on russian gas could be eased as a result added to the growing optimism. The reaction to the second consecutive year of economic recession confirmed on Tuesday in Germany also continues to offer a subdued backdrop for European energy demand.

The British spot price for gas rose last Thursday, driven by a decline in renewable energy production and rising demand. Thus, the NBP spot price jumped by more than 9% compared to the previous session, settling at £109.25/therm. The UK expects 13 LNG cargoes by the end of March (approximately 1.25 bcm). The NBP Summer-2025 contract soared by 8.4% to £107.42/therm as price parity with Asia increased competition for LNG supplies.

Prices of contracts with delivery in the relevant period, EUR/MWh, 02/27/2025

Month-ahead contracts at all analyzed hubs showed a different trend from spot prices, with an average decrease of 1.33%. Quarter-ahead prices were lower than spot prices by an average of 1.03%. The season-ahead prices with an average value of EUR 45.82/MWh tended to decrease by an average of 2.10% compared to the spot prices.

On February 20, the April LNG futures in Asia, the JKM Platts Future index, settled at USD 500.66 per thousand cubic meters. The LNG North West Europe Marker closed last Thursday at USD 469.52 per thousand cubic meters.

The level of gas storage in the EU was 39.54%, according to the Aggregated Gas Storage Inventory. The level of gas storage in the UK was 27%.

European LNG terminals operated at an average capacity of 78.5%. Two russian tankers, which are likely to circumvent the current sanctions, could potentially facilitate LNG supplies to Europe, signaling a ship-to-ship (STS) transshipment in the Mediterranean.

LNG stocks in the EU as of February 26, 2025 amounted to 4.079 million cubic meters, according to the Aggregated LNG Storage Inventors.

The storage level of the largest LNG exporter, the United States, according to the latest EIA data as of February 21, 2025, was 1.840 billion cubic feet, which is 11.5% below the average for the last five years.

On the related oil market, Brent crude oil prices were trading at USD 72.86/bbl on February 28, 2025. USD/barrel, as prices show the first monthly decline since November 2024, influenced by uncertainty about global economic growth and signs of a slowdown in the US economy.

Gas balance in Ukraine

Last week, natural gas imports from Hungary, Poland and Slovakia averaged 25 million cubic meters per day, including receipts at the customs warehouse. Exports from the “customs warehouse” were observed to Moldova and Hungary with an average volume of 1 million cubic meters per day. Ukraine had about 6.4 bcm in storage facilities. Withdrawals amounted to about 55 million cubic meters per day.

Interesting for the week

Europe plans to limit its gas consumption to achieve climate goals. Taken together, the EC’s analysis showed that the EU’s draft energy measures, previously reported by Reuters, could reduce the EU’s bills for imported oil and gas by EUR 45 billion in 2025 and increase annual savings of EUR 130 billion by 2030. “They (the projects) also involve large investments, that goes without saying. But we have to remember that it is also expensive to do nothing,” EU Energy Commissioner Dan Jorgensen said in an interview with Reuters.

Norway will provide Naftogaz Group with funds for gas purchases Naftogaz Group will receive funding from Norway for gas purchases - the funds will come through the European Bank for Reconstruction and Development. Ukrinform reports this with reference to the press service of Naftogaz. It is noted that the financing is part of a larger assistance package aimed at supporting Ukraine’s energy security. In total, Norway is allocating about 380 million euros for gas purchases, restoration of power grids, emergency generators, and nuclear safety.