European gas prices have fallen below EUR 28/MWh, even with cold weather and low storage levels. Current gas reserves in Europe are about 10% lower than usual for this time of year, sitting at just over 60%. Experts predict milder temperatures soon, following the current cold snap in Europe. In the US, Henry Hub prices have dropped by about $2 after peaking at $5.50 per mmBtu due to recent heavy withdrawals. The FXStreet Insights Team shares insights from market analysts about gas pricing and how it reacts to weather changes. A similar trend occurred at the end of 2025 when the market overlooked low storage levels, focusing instead on warmer weather forecasts. This caused gas prices in both Europe and the US to decline, showing a pattern of selling off ahead of milder temperatures. This past behavior can guide our current strategy. Today, the situation in Europe is less severe than in 2025. Gas storage in the EU is currently at a healthy 81%, much better than the 60% observed then. This higher inventory means the market is less likely to react strongly to brief cold spells. For traders watching TTF futures, this indicates that any price jumps due to cold weather in the coming weeks may not last long. We should see these spikes as chances to start short positions or buy put options. The market has shown it will ignore immediate demand in favor of a milder forecast, and with more gas in storage, that likelihood is even stronger now. In the US, the Henry Hub market is also in a different place compared to the spike to $5.50/mmBtu in late 2025. Current prices are around $2.75/mmBtu. With US dry gas production reaching record levels of over 105 billion cubic feet per day, the supply pressure is high. This suggests the ceiling for winter price increases is lower than in previous years. Given these conditions, derivative strategies should align with current market behavior. Selling call spreads during price increases can help us profit from expected declines once weather forecasts become milder. This approach allows us to benefit from the likely decrease in volatility and price once fears of cold weather dissipate.

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