Why are European natural gas prices tumbling despite the cold winter?

European natural gas prices have fallen sharply in recent days, with the Dutch Title Transfer Facility (TTF) benchmark dropping below €28 per megawatt hour on Tuesday — a level not seen since April 2024.

This comes despite a relatively early and cold start to winter across much of continental Europe.

Since January, European gas prices are down more than 45%, and over 90% from their record highs during the 2022 energy crisis.

At first glance, this drop appears counterintuitive as temperatures drop and gas storage levels remain relatively low. As of November 30, European inventories were 75% full, roughly 10% below the five-year average.

In Germany, Europe’s largest gas market, storage levels are even weaker at just 67%, more than 20% below seasonal norms.

The main driver behind the falling prices lies across the Atlantic.

The United States has ramped up exports of liquefied natural gas (LNG) to Europe, offsetting reduced Russian supplies and reshaping the global energy balance.

According to Kpler data, US cargoes have accounted for around 56% of Europe’s LNG imports this year.

With Asian demand relatively weak and US export capacity strong, Europe has become the primary destination for American LNG.

This consistent inflow is exerting downward pressure on the TTF, narrowing the spread – or the price differential – between European and US natural gas prices.

Historically, US gas — priced at the Henry Hub facility — trades at a discount to the European TTF due to abundant domestic production in North America.

However, that spread has shrunk dramatically in 2025, falling from about $12 per million British thermal units (MMBtu) at the start of the year to just $4.8, the lowest since May 2021.

Currently, TTF gas trades at just under $10/MMBtu, only twice the price of Henry Hub gas, which averaged $5.045 this week.

For context, during the 2022 energy crisis, TTF prices surged to €350/MWh (around $100/MMBtu), while Henry Hub was near $10, creating a record transatlantic spread of nearly $90/MMBtu.

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The shrinking price gap reflects a broader realignment in global energy flows.

US LNG has become Europe’s safety valve, easing fears of shortages and bringing a sense of normality back to markets.

The more LNG the US can export, the more it can relieve price pressure in Europe.

Looking ahead, analysts at Goldman Sachs foresee this rebalancing trend continuing through the decade.

Samantha Dart, head of commodities research at the bank, expects rising global supply — particularly from the US — to lift European storage levels and gradually push TTF and prices lower, forecasting TTF at €29/MWh in 2026 and €20/MWh in 2027.

By 2028–2029, storage congestion in Northwest Europe could drive TTF as low as €12/MWh, closing the US LNG export arbitrage and forcing cancellations of American cargoes.

This would in turn depress US prices, with Henry Hub potentially falling to $2.70/MMBtu.

Post-2030, however, Goldman sees the potential for renewed LNG tightness, led by China’s decarbonisation policies and rising Asian infrastructure investment. That shift could restore the transatlantic arbitrage, lifting Henry Hub back above $4 and TTF above €30/MWh from 2033.