Faster than ever since 2018 it has run out of reserves as cold weather increases heating needs, while temperatures are expected to fall again this week. Europe’s vast underground gas storage sites – which act as a regulatory factor to deal with the narrowest flows – are just over 70% complete compared to about 86% a year ago. Although there is no risk of immediate shortage, rapid exhaustion can make it more difficult to create stocks in view of the next heating period and affect short-term prices. CORVERSE Storage levels have been reduced by a total of 25 percentage points since their peak – more than any drop since 2018, according to Gas Infrastructure Europe data gathered by Bloomberg. “The lower the storage levels at the end of March, the more difficult it will be for the area to reload ahead of next winter,” said Samantha Dart, head of Goldman Sachs Group’s gas research. The weather has become colder in most of northwestern Europe, which could push further stock reductions over the next few days, as the use of natural gas for heating increases. The continent is also increasingly exposed to market volatility, as it depends on global liquefied natural gas to replace the deficit left at the end of the flow of the Russian pipeline through Ukraine. CORVERSE Unplanned holidays in top suppliers can affect the fragile balance of the region and cause price fluctuations. In Norway, the Hammerfest liquefied natural gas plant ceased operation until 9 January due to damage. The Dutch gas of the first month, the European reference point, yielded by 3.1% to EUR 48.11 per megawatt hour today (6.1.24). However, it is still increased after the 4% rise last week, as the market struggles with reducing stocks and narrower supply. It could be a technical reversal after the recent price rally, Florence Schmitt, a European strategic energy analyst at Rabobank said. The climate is still rising, but the market adapts to “new normal”, he said.
At record rates they drain gas reserves in Europe
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