European industries continue to be hesitant about boosting natural gas consumption, although prices are now a fraction of the records seen in 2022 and Europe appears to have put the worst of the energy crisis behind.

The still high volatility in gas futures prices, compared to historical averages, and uncertainties ranging from geopolitical flare-ups in the Middle East to the U.S. pausing new LNG export project approvals, continue to be a concern for European industrial gas customers, analysts tell Bloomberg.

The implied volatility of the Dutch TTF futures, the benchmark for Europe’s gas trading, has eased in recent months, but it is still holding above the average levels from before the energy crisis, per Bloomberg’s estimates.

This makes Europe’s industrial gas buyers anxious about increasing their consumption of the fuel, especially if they have to make expensive hedges that may go the wrong way.

“Bringing back industrial activity requires a degree of confidence that prices will stay steady and, recently, we have seen a wide range of possible outcomes, which makes hedging — particularly in options — very hard and expensive,” Martijn Rats, global commodities strategist and head of European energy research at Morgan Stanley, told Bloomberg.

“It’s not about the absolute price level, but the expected volatility in markets,” Rats added.

The hesitance among European industrial gas users in evident in the fact that despite the plunge in benchmark gas prices, consumption hasn’t rebounded, according to Morgan Stanley’s strategist.

Weak demand from Europe’s industry, due to lower consumption and weak economies, has been one of the reasons of the gas price slump this winter, despite the peak demand period for heating. High level of inventories, weak demand from industry, and increased confidence that Europe could go through the winter without major supply disruptions have all led to traders becoming more bearish on Europe’s natural gas prices in recent weeks.