The cost of buying natural gas on the wholesale market has seen dramatic falls over the last 12 months due to weaker demand and strong supplies.

Average wholesale prices during 2014 are down 27% compared to 2013, according to the Wholesale Energy Market Review by Irish energy supplier Vayu.

Due to warmer than normal weather conditions, gas demand in Europe as been consistently lower than average this year on the back of reduced consumption for heating and power generation. 

This has resulted in strong stock-piling across all of Europe's main gas hubs, boosted by increased shipments of liquefied natural gas from major suppliers like Qatar.

In the spring months of this year, prices were about 32% lower year and year and fell further during the summer months despite a risk premium due to tensions  between Russia and Ukraine. 

Towards the end of the year, prices rose due to seasonal factors and higher demand, but still remained 23% lower year on year in the autumn months.

Weak economic data and a sharp fall in crude oil pries in recent months continue to contribute to downward pressures on longer term gas contracts in the wholesale market, Vayu noted.

"The outlook for gas supply remains very positive heading into 2015," commented Joanne Daly, senior energy analyst at Vayu.

"If mild weather conditions prevail in first quarter and there are few unplanned outages, we could enter next summer with record high storage levels. This will have a direct impact on gas prices," she added.

The analyst also said that energy traders are keeping a close eye on the Russia-Ukraine situation and continue to factor in a geopolitical risk premium. 

Vayu supplies gas to 20% of the country's industrial and commercial market.