European carbon prices continue to fall in early Monday morning trading, the last day of trading for the EUA Dec’24 futures contract. Also, today is the last auction of the year due to the holiday break during the Christmas and New Year period, normally a bullish market signal.

Meanwhile, the downtrend continues on the gas market amid a combination of milder weather, strong wind conditions and weak demand for LNG from Asian buyers. “TTF front month contract has fallen 12% in a matter of just a week” noticed Energi Danmark in a note this morning.

However, Europe is depleting its gas inventories at the fastest pace in years. According to Gas Infrastructure Europe data, as of 14 December, EU storage is 76,20% full (69,74% in Romania) which is around 13% lower than a year ago in the same period.

Still, considering the recent downward trend, it appears that market participants are now confident that Europe could get through winter without Russian gas in light of no more Russian gas transit through Ukraine at the start of next year. According to ING latest foreacts, at the end of March 2025, storage could be at around 40% full.  While significantly down from the 58% full at the end of March 2024, “this storage is still fairly comfortable on a historical basis.”

Furthermore, European energy related  markets are breathing a sigh of relief from China where LNG imports have slowed in recent weeks due to rapid increase in prices. “The 30-day moving average of Chinese LNG imports is now 12% below the four-year average for this time of year”, writes Bloomberg.