Europe gas stocks hit lowest level since 2021

Europe's natural gas storage is at 58 percent, the lowest level since 2021, raising questions about winter supply as prices stay above pre-crisis levels.

Summer is normally when energy firms refill gas storage before colder weather lifts demand for heating, electricity and industry. Anne-Sophie Corbeau, a researcher at Columbia University's Center on Global Energy Policy, said storage would typically be around 75 to 80 percent at this point in the year.

Gas Infrastructure Europe figures cited by Kpler put current storage at 58 percent. Kpler analyst Ronald Pinto said the European Union ended last winter with underground storage at 28 percent, lower than in previous years.

Pinto said European imports were hit after US and Israeli strikes against Iran led Tehran to effectively close the Strait of Hormuz to Gulf tanker traffic, halting Qatari LNG shipments. He said Italy, Poland and Belgium had been unable to import Qatari LNG since April 2.

The Dutch TTF contract for September delivery is trading around 55 to 58 euros per megawatt-hour, compared with 30 euros before the Middle East war and 15 to 20 euros before the war in Ukraine.

An EU Commission spokesperson said filling storage to 80 percent “is sufficient to secure winter supply and it is technically achievable”. The spokesperson also said EU gas demand is 17 percent below pre-crisis levels before 2022.

Analysts warned that risks remain. Rystad Energy analyst Antonia Syn said reduced LNG availability from the Middle East was keeping supply risks elevated. Pinto said he expected average monthly prices to remain at 55 to 62 euros per megawatt-hour through the rest of the year.

Corbeau said conservation measures could become necessary if stocks remain low, winter is severe and another supply problem emerges.