European gas prices remain low, just above €31 per MWh, which is about 25% cheaper than this time last year. This drop in prices is due to a rise in liquefied natural gas (LNG) supply, even though Europe’s gas storage is lower than usual. LNG availability has improved largely because the US has boosted its production while China’s demand has fallen. In October, China’s gas imports reached a six-month low of 9.78 million tons, down 6.2% from last year. The decline in China’s LNG imports has been significant. From January to September, imports dropped by nearly 17%. Data from Kpler shows that October marks the twelfth consecutive month of falling imports for China, with mild early winter temperatures suggesting this trend will continue. Current European gas prices hover around this year’s lows, at just over €31 per MWh. Storage levels are at 82.6%, lower than last year’s 93.3% and below the five-year average. Despite this, the market appears calm about the storage deficit as winter approaches. The stability in prices comes from the strong and consistent supply of LNG. Since the energy crisis of 2022, Europe has expanded its import terminals, and global gas supply has improved. This abundance is more than compensating for the lower storage levels. Much of this extra LNG is from increased output in the United States, which is now the world’s leading LNG exporter. Additionally, China’s weak demand this year has allowed more cargoes to flow to Europe. Their recent data shows that overall gas imports hit a six-month low in October. China’s dwindling LNG imports are crucial. They have fallen for the twelfth straight month, with imports down over 15% from January to October 2025 compared to the same period last year. This situation is similar to the demand dip in 2022, which helped lower European prices during a critical period. With mild temperatures expected at the start of winter in Europe, there are no signs of a sudden rise in heating demand. For traders, this indicates continued downward pressure on prices. Strategies such as buying put options on Dutch TTF futures look appealing. However, a risk remains if a prolonged cold snap or significant disruption to US supply occurs.

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