Natural gas prices in Europe and the United States have tumbled to levels last seen before Russia sparked a global energy crisis by invading Ukraine. Wholesale European gas prices, as measured by the benchmark Dutch futures contract, have dropped almost 48% since mid-December to trade at €71 ($74) per megawatt hour on Friday — roughly where they stood on February 15 last year, a little over a week before Moscow’s unprovoked assault on its neighbor. Prices are now nearly 80% below their all-time August high of €346 ($364) per megawatt hour. In the United States, the cost of wholesale gas flowing through the Henry Hub pipeline — which serves as the country’s price benchmark — has dropped 50% to $3.68 per million British thermal units (Mbtu) since late November, back to around levels last seen in December 2021. After a period of extreme cold that swept the United States last month, the return of warmer weather in January has helped rebalance gas stores, pushing prices lower, Massimo Di Odoardo, vice president of gas and LNG research at Wood Mackenzie, told CNN. Europe can also thank a record-breaking spell of warm weather, as well as its own barnstorming effort last summer to fill gas storage, despite a slump in imports from Russia, its biggest supplier before the war. “There’s no panic any more,” Henning Gloystein, director of energy, climate and resources at Eurasia Group, told CNN, referring to fears swirling last year that Europe could be forced to ration gas over the winter. It’s encouraging news for the millions of households and businesses across the continent who have struggled to pay their soaring energy bills. But they shouldn’t expect immediate relief, analysts told CNN. Falling energy prices have helped bring down inflation. Across the 19 countries that share the euro currency, consumer price inflation dropped to 9.2% in December from 10.1% the month before. Even so, European gas prices are still historically high, and could rise again this year if demand from China picks up or supplies are disrupted. It will also take some time for lower wholesale prices to feed through to consumers’ bills, given that some countries have either fixed or capped current prices for the next few months. Still, the region is in “a much better position compared to what people feared only a couple of months ago,” Di Odoardo said. According to Gas Infrastructure Europe, the continent’s storage facilities are currently 83% full. That’s well above the 69% the EU averaged at this point in the five years to 2021. Demand is down Efforts by European households and businesses to use less gas — encouraged by the voluntary 15% reduction target set by the EU — have helped. Di Odoardo estimated that residential demand for gas dropped by a fifth in November. Moves by industrial consumers to switch fuels and find efficiencies have also paid off, leading to a 20% cut in demand in the latter half of 2022, compared with the same period the year before, he said. Europe has rapidly learned to live without Russian gas after Moscow slashed its pipeline exports last year. The bloc has boosted imports from Norway and snapped up supplies of liquefied natural gas — a chilled, liquid form of gas that can be transported via sea tankers — mostly from the United States and Qatar. The continent has also raced to build the facilities needed to receive LNG via ships and convert it into gas that can be transported through pipelines. Germany, the bloc’s biggest consumer of gas, recently opened two regasification terminals, and plans to bring another two online in the coming days, Gloystein said. Still, as the continent looks to fill its stores ahead of next winter with very little Russian gas, problems could arise. According to Gloystein, the task is “going to cost a lot of money” given, in part, how vulnerable the bloc is to price rises in a tight LNG market. A pipeline outage in Norway, or a drop in US exports caused by extreme weather, could feasibly trigger a price spike. A recovery in demand in China, which recently ditched its strict zero-Covid policy, could also push prices higher again, according to a Deutsche Bank analysis released last month. An ‘expensive cocktail’ Despite their recent steep decline, gas prices in Europe are still more than four times higher compared to the average over the past decade, Philip Lausberg, policy analyst at the European Policy Centre, told CNN. Wholesale prices were already shooting up in the months before the war as economies reopened from pandemic lockdowns. Then, a surge in prices following Moscow’s invasion sent consumer bills soaring further and forced governments to stump up huge subsidies. According to an analysis by Bruegel, a Brussels-based think tank, European governments, including the United Kingdom, committed around €705 billion ($739 billion) between September 2021 and last November to help shield consumers from painful rises to their bills. Giovanni Sgaravatti, a research analyst at Bruegel, told CNN that it could take up to five months for consumers to see their bills come down. “It will take a bit [of time] for the fall in the wholesale prices of natural gas to [feed into] into the retail prices,” he said. “We’re not really out of the woods,” he added. That’s partly because of the way countries regulate the price of energy. Some countries, like the United Kingdom and Germany, either fix or cap prices for a set period of time, meaning consumers will be paying higher bills for longer, analysts told CNN. UK wholesale gas futures for the second quarter of this year have dropped 66% since September, according to HSBC Global Research. UK household bills could start to fall from July, if market prices fall below the government’s annual £3,000 ($3,573) cap. The country’s businesses could feel the impact of lower wholesale prices sooner, when the government withdraws its support in April. “As energy suppliers buy their gas and electricity in advance to fix some of their costs, wholesale price decreases are not immediately passed through to consumers,” Lausberg said. “If the wholesale price remains low, consumers could profit from cheaper energy bills in a few months,” he added. Moreover, some power companies will need to pass on the costs of the new LNG infrastructure, Gloystein said. “Everything put together is a pretty expensive cocktail,” he said. That will keep Europe at a competitive disadvantage to the United States, where gas prices are about five times lower. “For companies that have a business model where energy represents a good chunk of their costs, they could be incentivized to move to the US,” Sgaravatti said. “So that is a bit of a worry.” — Christian Edwards contributed reporting.