London CNN  — 

Europe’s natural gas prices have tumbled to their lowest level in nearly 18 months in the latest sign the region has avoided a much-feared energy crisis.

Benchmark wholesale gas prices fell almost 5% Friday to hit €49 ($52) per megawatt hour, their lowest level since September 2021 and a fraction of the all-time high of €320 hit in August last year, according to data from Independent Commodity Intelligence Service.

It’s a remarkable turnaround for a continent that, just a few months ago, faced shortages and potential blackouts as Russia — once its biggest supplier — drastically lowered gas exports to Europe in retaliation for EU sanctions over its war in Ukraine.

The plunge in prices will further reduce the risk of a recession in Europe.

Prices have been pushed lower by unseasonably warm weather this winter, as well as the region’s barnstorming efforts to conserve gas, find alternative suppliers and fill its storage facilities.

Gas stores across the European Union were 65% full on Thursday, according to Gas Infrastructure Europe, an industry body. That’s well above the 45% the EU averaged at this point in the five years to 2022.

The bloc has also boosted imports of pipeline natural gas from Norway, and of liquefied natural gas (LNG) — a chilled, liquid form of gas that can be transported via sea tankers — mostly from the United States and Qatar.

“Europe looks like it has successfully weaned itself off Russian gas,” Henning Gloystein, director of energy, climate and resources at Eurasia Group, told CNN.

“It’s still relatively expensive, compared with the pre-crisis long-term average, but current price levels do not reflect a risk of shortages anymore, as they did much of last year.”

Salomon Fiedler, an economist at Berenberg bank, said in a note on Friday that he expected Europe to avoid an energy crisis next winter, if — under average temperatures — it maintains its current import levels from non-Russian suppliers; gas consumption remains 20% below average levels; and domestic gas production stays the same.

“If worst came to worst, a combination of no Russian supplies, colder weather and significantly reduced [gas] savings — of only 10% — would expose the EU to a risk of shortages next winter,” he said, though this is an “unlikely combination.”

Competing with China

But demand for gas in China could come roaring back this year, tightening the global LNG market and exerting upward pressure on prices.

The world’s second-largest economy ditched its strict zero-Covid policy in December after more than three years, upping estimates for global economic growth as well as expectations for energy consumption as its citizens start spending and traveling again.

“Europe is in a much better position than feared only a few months ago,” Massimo Di Odoardo, vice president of gas and LNG research at Wood Mackenzie, told CNN. “But it is only from 2025, when substantial LNG supply will start hitting the market, that European prices could go back to some sort of normality.”