Europe’s gas reserves depleted as cold weather boosts demand

Europe is rapidly depleting its gas reserves amid cold weather, with storage levels now just over 70 per cent full, down from 86 per cent a year ago.

While there is no immediate risk of shortages, the accelerated depletion may complicate stockpiling ahead of next winter, potentially driving up short-term prices.

Gas storage has dropped by 25 percentage points, the largest decline since 2018, according to Gas Infrastructure Europe data on Monday.

Cold temperatures across northwest Europe are expected to increase gas withdrawals as heating demand rises. The region is also more vulnerable to market volatility due to its reliance on liquefied natural gas (LNG) following the end of Russian pipeline supplies.

Unplanned outages, such as the halt of operations at Norway’s Hammerfest LNG plant until January 9, could further disrupt the delicate balance and cause price fluctuations.

European gas prices remain high despite a 3.1 per cent drop in Dutch front-month gas to €48.11 per megawatt-hour. The market is adjusting to tighter supplies, with analysts noting that the sentiment remains bullish but the situation is evolving.

Attribution: Bloomberg

Subediting: Y.Yasser