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In a decade low gas storage in Europe

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In a decade low gas storage in Europe

The winter gas season starts on October 1 and continues until the end of March

Gas storage levels in Europe are at their lowest level in at least 10 years before the critical winter heating season, exacerbating the risk of further price rises from already record highs.

According to Reuters in European countries and Britain together, storage space is now about 72% full, compared to 94% in the same period last year and 85% on average over the last 10 years until the end of September. Gas storage is used as a regulator in times of high demand and limited supply.

The low levels now observed – just before the end of the feed-in phase in Europe's gas market – are a cause for concern, market observers say. The winter gas season, when prices are usually higher and more gas is withdrawn to meet demand, begins on October 1 and continues until the end of March.


“We expect European stocks to be around 78% of normal from October 1, when we reach the winter season, and that the loss of stocks is bothering the market,” said Russell Hardy, CEO of Vitol.

Gas storage was depleted last winter due to high demand , which was exacerbated by relatively weak renewable energy production and strong underlying energy demand, S&P Global Platts' James Huckstepp told Reuters. “Demand for energy and gas has also been strong in Asia, which is pushing LNG away from Europe.

This was combined with a global supply crisis and limited injections this summer, with the result that record stocks are low, as we enter the heating season “, he added. This in turn has pushed gas benchmark prices in Britain and the Dutch TTF – the main European gas market – high.


“There is a particular alarm in the UK as some smaller utilities went bankrupt due to higher prices,” Commerzbank analysts said. Several small retail companies in the UK, caught between bargaining promises and the need to cover high purchase costs, have collapsed.

The main rising factors in the last two months have been the suspension of Russia's supply and global LNG liquefaction issues. Supply from both sources should remain relatively limited for the rest of this year, regardless of the launch of the Nord Stream 2 pipeline, said S&P Global's Huckstepp.

The flow of natural gas through the pipeline that transports Russian gas to Europe could start in the fourth quarter, S&P Global expects. Although Russia's Gazprom has completed the construction of the Nord Stream 2 pipeline, which a Gazprom-led consortium will use to transport gas under the Baltic Sea to Germany, the German energy regulator has yet to approve the compliance with the laws of energy companies.

Source: 24h.com.cy

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