European gas prices have dropped below EUR 28/MWh despite cold weather and low storage levels. European gas reserves are about 10 percentage points lower than normal for this time of year at just over 60%.
Market forecasts anticipate milder temperatures following the current cold spell in Europe. Across the Atlantic, prices at Henry Hub have decreased by about $2 after reaching a high of $5.5 per mmBtu due to previous heavy withdrawals.
The FXStreet Insights Team shares these observations from market experts and analysts. The content reflects trends in gas pricing and market reactions to changing weather conditions.
We saw a similar pattern at the end of 2025, where the market ignored low storage levels and focused on milder weather forecasts. This pushed both European and US gas prices down, showing a clear tendency to sell off ahead of warmer temperatures. This past behavior provides a useful guide for our current strategy.
In Europe, the situation today is less tense than what we observed back in 2025. Gas storage levels across the EU are currently sitting at a comfortable 81% full, according to data from Gas Infrastructure Europe, which is significantly healthier than the 60% level seen at that time. This higher inventory buffer means the market is even more likely to shrug off any short-term cold snaps.
For traders looking at TTF futures, this suggests that any price rallies caused by cold weather forecasts in the coming weeks could be short-lived. We should view these spikes as potential opportunities to initiate short positions or purchase put options. The market has already shown us it will look past immediate demand in favor of a milder outlook, and with more gas in storage, that impulse is even stronger now.
Across the Atlantic, the Henry Hub market is also in a different position than it was during the spike to $5.50/mmBtu in late 2025. Current prices are hovering around a much lower $2.75/mmBtu, and with US dry gas production consistently hitting record highs of over 105 billion cubic feet per day, supply-side pressure is immense. This suggests the ceiling for any winter price rally is significantly lower than in previous years.
Given these conditions, derivative strategies should focus on this established market behavior. Selling call spreads during price increases can take advantage of expected drops once weather forecasts turn milder. This allows us to profit from the likely decay in volatility and price once the fear of a cold spell subsides.
