In January 2026, the average natural gas futures price on the ICE TTF exchange (setting the price for the entire month of February) reached 33.64 €/MWh - a 22% increase compared to the previous month. What influenced natural gas prices in Latvia?

Cold Weather Drives Gas Price Surge in Europe

Arctic cold persisted across many European countries for nearly the entire month of January. Heating and electricity generation required more natural gas than usual, with European consumption increasing by more than 20% compared to December. This rising energy demand could not be offset by renewable energy sources, as wind farms generated less power than in December. The additional demand was primarily covered by gas-fired power generation, thereby ensuring the stability and security of the entire European energy system.

European Gas Storage Levels

European underground gas storage facilities are depleting rapidly. As of February 1, storage levels stood at 41%, or approximately 133 TWh less than at the same time last year. The January cold snap resulted in daily withdrawals of 8–9 TWh. European storage facilities are currently operating at their most intensive levels in the last five years.

Market analysts estimate that Europe could end the season with storage levels at 22%. In Latvia, storage levels reached 35% by the end of the month, compared to 58% last year. This suggests a higher demand for gas to refill storage during the warmer months, potentially keeping market prices high even after the heating season ends.

Global Events Impacting the Market

• Nuclear Outages: Nuclear power plants generated less electricity than planned in January due to storms damaging several reactors in France and the UK. This further spiked the demand for natural gas. These reactors are expected to resume normal operations in the first weeks of February.
• Asian Demand: A cold wave in China, South Korea, and other Asian nations has increased the need for Liquefied Natural Gas (LNG) imports, reducing available LNG supplies in the Atlantic basin.
• Geopolitics: Geopolitical events - including unrest in Iran and statements from the Trump administration regarding Greenland - contributed to market volatility and uncertainty.

Rising Dependence on U.S. Gas Imports

As Europe phases out natural gas imports from other regions, it is being replaced by imports from the United States. LNG now covers approximately 40% of Europe's total gas demand. In 2024, the U.S. accounted for 46% of Europe's total LNG imports; by 2025, this share rose to 58%.

Europe is likely to import even more gas from the U.S. in 2026 and 2027 as new U.S. LNG export terminals become operational. Currently, Western European countries are the most dependent on American LNG, particularly Germany, which imports 92% of its LNG directly from the U.S.

Natural Gas Price Trends for Spring

Wholesale gas futures suggest that the average price at the start of spring will remain similar to the previous month. At the beginning of February, the price set for the entire month of March stands at 34 EUR/MWh, though the month has not yet concluded.