The price of European natural gas fell to its lowest level since late July on Monday.

In the morning, the price of the TTF futures contract for Dutch natural gas fell by almost 8 percent to around 189 euros per megawatt hour.

However, this means that the gas price is still about eight times higher than usual for the time of year.

The TTF contract serves as a guideline for the European price level.

Analysts at major bank Goldman Sachs expect prices to halve from current levels in the first quarter of next year.

A week ago, the gas price had skyrocketed to record highs of more than 300 euros per megawatt hour due to the temporary stop in deliveries via the important Nord Stream 1 pipeline.

Gazprom gave technical problems as the reason for the delivery stop.

However, it is assumed that Russia wants to put even more pressure on the West in the conflict over Ukraine.

Until recently, Russia was by far the largest gas supplier to the EU countries.

In 2021, 155 billion cubic meters of Russian gas arrived, covering almost 40 percent of EU needs.

According to a report by the Bloomberg news agency, the EU Commission now wants to oblige member states to reduce their electricity requirements.

The agency relies on a draft available to it.

In order to reduce electricity consumption, targets should be set both for reducing overall use and for selected peak times.

Low electricity consumption would also dampen demand for natural gas.

In addition, the Commission wants to skim off the profits of energy companies.

The commission will propose the measures this week, according to Bloomberg.

However, the member countries must agree.

As Bloomberg further reported, Commission President Ursula von der Leyen is expected to present concrete steps in her State of the Union address on Wednesday.

Disagreement on the design of the price cap

However, the member states of the Union disagree on how a price cap for gas should be designed.

Demand, energy mix and sources of supply are too different.

The idea of ​​a broad upper price limit – for all imports, not just for those from Russia – was only touched upon at a meeting of EU energy ministers on Friday and was postponed for further elaboration.

There was also no agreement on binding savings targets.

Norway is "skeptical about a maximum price for gas," said Prime Minister Jonas Gahr Store after a meeting with Commission President von der Leyen on Monday.

"A maximum price will not change the fundamental problem that there is not enough gas in Europe." Norway has done its utmost to improve the situation in Europe and is now pumping 8 percent more natural gas to Europe than before the war broke out.

Analysts at Goldman Sachs believe that the high storage levels at the beginning of the season will allow above-average withdrawals, so that the reservoirs will still be more than 20 percent full by the end of March.

"Against this backdrop, the sense of urgency to destroy demand will gradually give way to a sense of market relief that we have come through the winter," say the analysts, who expect prices below EUR 100 per megawatt hour in the first quarter.