Europe has entered the heating season with the thinnest gas buffer of the decade. EU storage sites were 71.6 percent full in Gas Infrastructure Europe’s November 11 update, with Germany at 58 percent, well under the five year average for the start of winter.
Storage peaked at 74.96 percent on October 28 and has fallen since, with levels at the lowest for the date since 2011 on GIE data back to that year. The International Energy Agency put stocks at the start of the heating season at their lowest since 2013 and modelled a cold winter combined with continued disruption in the Strait of Hormuz pushing EU storage below 10 percent of working capacity by the end of March 2027.
Asian spot LNG is trading above 30 dollars per million British thermal units. Rystad Energy, in a winter outlook published this week, stopped short of predicting a further rally and told buyers to plan for a wide range of outcomes, laying out as many routes for prices to fall as to rise.
The storage position is the physical backdrop to yesterday’s German decision to build a 24 terawatt hour state reserve after national storage ended October at 62 percent against a 70 percent target. The market mechanism did not fill the caverns, and the winter draw has already begun.