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EU gas storage units could be full by Sept – analyst

(Montel) EU gas storage sites could be full by September but prices look unlikely to return to pre-energy crisis levels, with the continent competing on global markets to attract costly LNG, an analyst said on Monday. 

Consultancy Cornwall Insight pointed to various factors for contributing to its prediction of full storage units, including the diversification of gas procurement and unseasonably warm weather this winter.

These factors, combined with reductions in demand from both industry and the power sector, had resulted in European gas storage levels being maintained well above the historical range for this time of year, it said.

If the spring and summer turned out to be mild, windy and wet, this would limit gas demand and accelerate refilling, the analyst said.

EU storage units could end this winter between 45-61% full, with an average of 55%, thereby bolstering Europe’s security of supply, it predicted.

However, it noted the continent still faced challenges in replacing Russian pipeline supplies, including greater energy demand from China. 

Moreover, the lower levels of snowfall being reported across Europe could lead to diminished hydropower stocks due to less snowmelt and therefore increased gas demand over summer. 

Price risks remain

“Forecasts for European gas storage levels going into next winter are considerably more positive than they were last autumn,” said Matthew Chadwick, lead research analyst at Cornwall Insight. 

However, he added: “Any single factor can influence the pace and pattern of storage refill, and perhaps more pertinently, change the cost paid to achieve it. We are certainly not out of the woods yet.” 

He expected gas prices to be “muted” in 2023, compared with the record levels seen in 2022.

European gas storage sites were last seen 59% full on average, according to Gas Infrastructure Europe.