Although European prices have dropped to around 50 euros ($53) per megawatt hour (MWh) from last August’s peak of more than 340 euros, they are still above historical averages.
This means European governments face another hefty bill to refill storage ahead of peak winter demand.
To offset market volatility and avoid shortages, they will have to repeat the exercise annually until the continent has developed a more sustainable alternative to the Russian pipeline gas it has depended on for decades.
Analysts and officials say the amount already in storage will help, as French nuclear production will increase after unusually extensive maintenance.
“At the moment the situation in the gas market is not that tense,” Markus Kreber, CEO of RWE, Germany’s biggest utility, told Reuters.
He did not expect any repeat of last year’s record price rise, but added that “one should not lull oneself into a false sense of security”.
Similarly, analysts cautioned against taking too long to buy for future deliveries.
“We don’t expect filling storage next summer to be as expensive as it was last year,” said Jacob Mandel, senior analyst at Aurora Energy Research.
“That said, companies that rely on spot supplies to fill storage rather than hedge against future price surges will risk paying the same costs as last summer.”
He estimated that buying gas in the summer months would “cost 2-2.5 times more on a per unit basis than pre-crisis” and that European governments spent billions of euros on supplies last year.
This was even as they received significant levels of Russian gas on long-term contracts ahead of the closure of the Nord Stream pipeline to Germany in August.
The shutdown of Nord Stream pushed up European gas prices, as well as liquefied natural gas (LNG) prices, which have now reached record highs of around 70 million British thermal units (mMBtu), compared to around $16 .