Gas price: Ukraine and Europe. Market overview March 3 - 7, 2025

Ukrainian Energy Exchange

Last week, trading in March and April 2025 continued. In total, 9 companies formed positions for the purchase and sale of natural gas: Ukrzaliznytsia, D.Trading, PPC Naftogaz Trading, Nadra-Geoinvest, GTS Operator of Ukraine, MC Ukrnaftoburinnya, Ukrnafta, etc.

Starting prices of resources had a mixed trend throughout the week. As a result, as of Friday, the average starting price of March resources in the GTS was 0.65% lower than on Monday.

Last week, the purchase positions were sold. In total, 4,000.00 thousand cubic meters of natural gas were sold. The positions of the Ukrainian GTS Operator and Ukrzaliznytsia were successful. Last week’s quotation prices for March resources were in the range of UAH 16440-16900 excluding VAT.

On the short-term natural gas market of the UEEX, participants placed bids in the GTS and UGS. Last week, compared to the previous period, there were diverse price movements and stable trading activity. The weighted average price of the DAM on Friday, March 7, amounted to UAH 16800 excluding VAT.

European market

Last week, gas prices continued their downward trend, with speculative investors closing long positions in gas trading to lock in profits. The downward trend was driven by a combination of strong supply, weak demand due to warm weather, poor economic data, and a loosening of EU policy toward russian gas.

On the geopolitical side, the EU is considering the continuation of russian gas transit through Ukraine. In addition, the EU has postponed the implementation of the roadmap for a complete cutoff of Russian gas, reflecting a more flexible approach due to energy security concerns.

The European Central Bank’s downgrade of its economic growth forecast for the eurozone for 2025 from 1.1% to 0.9%, citing uncertainty that indicates a decline in industrial activity, increased pressure on gas prices. In addition, worse-than-expected construction PMI data in the eurozone point to a slowdown in energy-intensive sectors.

Prices of contracts with delivery within the relevant period, EUR/MWh, 06.03.2025

Month-ahead contracts at all the analyzed hubs showed a different trend from spot prices, with an average decrease of 1.23%. Quarter-ahead prices were lower than spot prices by an average of 1.02%. The season-ahead prices with an average value of 40.03 EUR/MWh tended to decrease compared to the spot prices by an average of 1.16%.

On March 6, TTF Day-Ahead prices fell by 7.7% under pressure from forecasts of warmer weather and strong solar production that exceeded seasonal norms. The sharp drop in TTF prices flipped the NBP-TTF spread from a discount of £1.4/therm to a premium of £0.52/therm, creating stronger incentives for UK imports. The spot price of NBP fell by 6% to £93.25/therm last Thursday due to stable generation in the UK and strong Norwegian flows combined with lower demand.

Spot buying in Asia remains subdued due to high inventory levels and the absence of importers, which weakens supply competition and puts pressure on the bearish forward curve. On March 6, the April LNG futures in Asia, the JKM Platts Future index, settled at USD 490.10 per thousand cubic meters. The LNG North West Europe Marker closed last Thursday at USD 465.04 per thousand cubic meters.

The EU’s gas storage level was 37.17%, according to the Aggregated Gas Storage Inventory as of March 5, 2025, which is significantly lower than the 62% level at the same time last year. The level of gas storage in the UK was 32%.

European LNG terminals operated at an average capacity of 78.45%.

As of March 5, 2025, LNG stocks in the EU amounted to 4.29 million cubic meters, according to the Aggregated LNG Storage Inventors.

According to the latest EIA data, the storage level of the largest LNG exporter, the United States, as of February 28, 2025, was 1.76 billion cubic feet, which is 11.3% below the average for the last five years.

On the related oil market, Brent crude oil prices on March 7, 2025 were trading at USD 69.53/barrel and remained on track for its biggest weekly drop since October, down 5% for the week, weighed down by the uncertainty of US tariffs and rising OPEC+ supply.

Gas balance in Ukraine

Last week, natural gas imports came from Hungary, Poland, and Slovakia with an average volume of 14.6 mcm per day, including receipts to the customs warehouse. Due to the warming weather, imports decreased by about 1.5 percent compared to the previous week. Exports from the “customs warehouse” were observed to Moldova and Hungary with an average volume of 2.7 million cubic meters per day. Ukraine had about 6 bcm in storage facilities. Withdrawals amounted to about 40 million cubic meters per day.

Interesting for week

The EU proposes to maintain the target for filling gas storage facilities until 2027. The proposal states that the EU executive is in favor of maintaining the target of filling EU gas storage facilities by 90% by November 1 of each year until 2027, as well as a number of interim targets in the months before November. The Commission recommended that countries use existing flexibilities in the rules and said it could be more lenient with countries that did not meet their November target due to gas market conditions. The Commission’s proposal states that the November 1 target will remain binding, but points out that the targets for previous months are “indicative,” which in EU law usually means non-binding.

McKinsey estimates a possible decline in gas consumption in Germany to 690-720 terawatt-hours (TWh) by 2030 from the current 740 TWh, as McKinsey assumes a slower-than-expected transition from gas boilers to electric heat pumps and a higher-than-expected demand for gas in electricity generation and district heating . German households and businesses consume 45% of annual gas demand, industry uses 30% for its processes, and power plants 25%. “Germany is likely to be dependent on natural gas for longer than previously anticipated,” said Thomas Walenkamp, senior partner in McKinsey’s Düsseldorf office.