EU gas storage at multi-year low for late August, winter risk rises
This digest was compiled by AI from multiple sources — links to the originals are below.
EU gas storage levels are at their lowest for late August in years, with facilities filled to 63% versus an 80% average. Analysts warn the bloc may enter winter with stocks about a fifth below the five-year average, the lowest since 2013. Prices have surged to a three-year high above €68 per megawatt-hour as winter supply concerns mount.
Key Facts
- EU gas storage facilities were 63% full in late August, well below the 80% average for this time of year.
- Gas analyst Greg Molnar estimates the EU will enter winter with stocks about a fifth below the five-year average, the lowest since 2013.
- European gas prices rose to a three-year high above €68 per megawatt-hour in recent weeks.
- Goldman Sachs analysts say the European benchmark gas price may need to exceed €100/MWh to attract enough supply for winter demand if Middle East exports do not resume.
- Germany's economy ministry said on August 20 that no gas shortage is expected this winter, with storage levels of 60-70% sufficient to cover average demand.
Storage Levels
EU gas storage facilities were 63% full in late August, significantly below the 80% average for this time of year. Gas analyst Greg Molnar told The Guardian that at current slow injection rates, the EU will likely enter winter with stocks about a fifth below the five-year average and at the lowest level since 2013. Molnar warned that low storage levels increase the risk of heightened price volatility in winter, especially during cold spells or periods of weak wind that raise gas consumption. The Guardian reported that EU storage is below targets due to disruptions in oil and gas exports from the Persian Gulf caused by the US-Israel war against Iran, and higher gas-fired power generation during Europe's summer heat.
Price Surge
European gas prices rose to a three-year high above €68 per megawatt-hour in recent weeks. Prices jumped on expectations that EU market participants will have to compete with Asian buyers for LNG supplies as temperatures drop. Bjarne Schieldrop, chief commodities analyst at SEB, said a 'winter panic' broke out on the European natural gas market last week because no one expects the Strait of Hormuz to reopen soon. Goldman Sachs analysts said that without a resumption of Middle East gas exports, the European benchmark gas price will likely need to exceed €100/MWh to attract enough supply for winter demand.
Germany's Position
Germany's economy ministry said on August 20 that no gas shortage is expected this winter. The ministry calculated that Germany can cover average winter gas demand if its storage facilities are filled to 60-70%, taking import capacity into account. Supply problems are particularly acute in Western Europe, where storage levels are significantly lower than in Italy and Poland, which have refilled their gas storage to more than 80%.
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EU gas storage at multi-year low for late August, winter risk rises
