Europe’s gas surplus shrinks

Europe’s gas storage refill season started unusually slowly, shrinking the surplus from last winter and pushing prices above the long-term average.

Data from Gas Infrastructure Europe (GIE) shows EU and UK inventories increased by just 148 TWh, or 2.1 TWh per day, since March 31, the second-slowest refill since 2012.

The surplus, which was 277 TWh when winter ended, narrowed to 219 TWh by June 9. Despite being 37 per cent above the ten-year average, the surplus has decreased.

Inventories, now at 72 per cent capacity, are expected to reach 1,223 TWh, surpassing the system’s 1,145 TWh capacity, necessitating slow refilling for weeks or months.

Lower international gas prices diverted liquefied natural gas (LNG) away from Europe to price-sensitive buyers in Asia. This trend, coupled with increased gas consumption in Asia due to heat waves, has kept Europe’s surplus intact. However, as the surplus diminishes, competition between Europe and Asia for LNG may intensify, potentially driving prices up, especially in the event of a cold winter across Eurasia.