European gas: Low storage keeps a floor under prices into winter - ING
ING’s Warren Patterson says European gas prices have climbed above EUR70/MWh as lower Persian Gulf LNG supply and strong Asian spot buying cut EU LNG imports by about 16% year-on-year between April and July. EU storage was around 65% full at the end of August versus an 82% five-year average, with inventories projected at 72–73% at the start of the heating season, potentially prompting faster purchases and limiting downside for prices into winter.
Low storage supports gas prices
"European gas prices have recently exceeded EUR70/MWh, their highest since March. Lower Persian Gulf LNG supply has tightened the global market, while strong Asian spot buying pushed EU LNG imports down about 16% year-on-year between April and July. We believe imports should stabilise and recover on a month-on-month basis because freight economics now favour sending spot cargoes to Europe."
"Slower injections left EU storage around 65% full at the end of August, versus a five-year average of 82% and below 2021 levels. Our balance points to inventories of 72-73% at the start of the heating season, well below the headline 90% target and potentially below the flexible 75% threshold."
"Some member states may therefore need to accelerate purchases, supporting prices as winter approaches. Low storage limits the downside for European gas prices under any of our Persian Gulf scenarios."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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