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Europe ended the winter with record levels of natural gas reserves, putting the region in a much better position to emerge from an energy crisis that has cast a shadow over more than two years.
EU gas storage at the end of March, considered the end of winter by the industry, was 58.72 percent, according to industry body Gas Infrastructure Europe. This is about 3 percentage points higher than the previous high level recorded last year.
The abundant levels put the EU in a comfortable starting point as it refills its storages over the summer, and analysts warn that the bloc may need to reduce LNG imports in the coming months to avoid filling its capacity too early.
A generally mild winter across Europe, strong LNG imports, lackluster economic activity, and EU demand-reduction targets have helped keep gas use in check. Demand was about a fifth lower in February than 2019-2021 averages, according to data from research center Bruegel.
That the EU finds itself in such a comfortable position “is a surprise to everyone,” said Anna Maria Galer-Makarowitz, senior energy analyst at the Institute for Energy Economics and Financial Analysis, a think tank.
“We thought[at the start of the energy crisis that]. . . “We had a lot of problems,” she said. She added that the EU's decision to increase LNG imports and introduce gas saving measures was “very important” for the EU.
Europe's energy crisis began in 2021 as the region emerged from a long, cold winter with low levels of natural gas storage. Concerns about tight supplies accelerated as Russia began sending less gas to Europe, in what some saw as a tactic to pressure Germany and Brussels to agree to start operating the controversial Nord Stream 2 gas pipeline.
The European Union has now gone through successive winters without major disruption to its energy system, something few thought possible at the beginning of the crisis, when blackouts were talked about as a real possibility.
“Europe has a glut problem this summer,” said Natasha Fielding, head of European gas pricing at pricing agency Argus Media.
She indicated that the European Union could achieve its goal of reaching 90 percent of energy capacity by the beginning of November in early August if the pace of pumping is similar to last year.
“Europe may need to take on less LNG this summer to offset weak demand and slow the pace of inventory builds, thus avoiding early filling of sites.”
Last year, European traders stored surplus gas in underground storage sites in Ukraine despite the risks of war. Last week, Russia attacked an underground storage site, although “the situation will not seriously affect” operations, according to Naftogaz, the state energy company.
Despite record amounts of gas in storage for this time of year, the TTF price, an index of natural gas prices in Europe, rose by about 20 percent compared to last month when prices fell to pre-energy crisis levels, as supplies tightened due to maintenance at an export facility. Major American.
However, gas prices “cannot rise too high or fall too low” from current levels of around 25 euros per megawatt hour, analysts at Engie said in a note on Monday, thanks to abundant gas in stock. .
