Mission accomplished? Europe fills gas storage ahead of schedule: Kemp



By John Kemp

LONDON, Oct 5 (Reuters) - Europe is entering winter with a near-record volume of gas in storage after buying large volumes at almost any price over the summer to prepare for an interruption of supplies from Russia.

Gas inventories in the European Union and the United Kingdom (EU28) had climbed to 996 terawatt-hours (TWh) by Sept. 30, according to data from Gas Infrastructure Europe (GIE).

For the time of year, inventories were at the third highest on record, with higher volumes only in 2020 (1,074 TWh) and 2021 (1,067 TWh) (“Aggregated gas storage inventory”, GIE, Oct. 4).

Storage had risen by around 700 TWh from its post-winter low, the second-fastest increase on record, as suppliers purchased as much gas as possible despite exceptionally high prices.

As a result, stocks ended the summer refill season +98 TWh (+11% or +0.83 standard deviations) above the prior ten-year average.

This is a huge turnaround from the end of January, when they were -134 TWh (-23% or -1.34 standard deviations) below.

Chartbook: EU28 gas storage

Inventories are likely to continue increasing for at least another three weeks until late October, but the build could persist into early November, depending on temperatures and how far high prices restrain consumption.

Since 2011, the median date on which storage peaked was Oct. 26, but in two cases inventories continued rising into the first half of November.

Late-season storage builds are doubly beneficial for supply security: late builds increase pre-winter inventory and postpone the start of depletion.

Exceptionally high prices should prolong storage builds this year later than normal unless temperatures become exceptionally cold by late October.

Based on previous seasonal movements, storage is expected to peak around 1,025 TWh, with a likely range from 1,009 TWh to 1,053 TWh.

But the volume of gas in store is still increasing at an average rate of more than 2.3 TWh per day, implying it is likely to climb towards the top of the range.

IS IT ENOUGH?

EU storage is more than 89% full and UK storage is more than 94% full, with extra stocks likely to be added over the next 3-6 weeks.

Storage is well ahead of the formal target of 80% this year (preferably 85%) by Nov. 1 agreed by the EU in June (“Council adopts regulation on gas storage”, European Council, June 27).

European governments have fulfilled their stated objective of maximising the volume of gas in storage ahead of winter 2022/23 to reduce the impact of a disruption of pipeline supplies from Russia.

But storage is intended to deal with seasonal variations in consumption, not provide a strategic reserve in case of an embargo or blockade.

Maximising the volume of stored gas will alleviate the impact of any supply disruptions but it is not enough to guarantee supply security.

In the event of a complete cessation of imports from Russia, a colder than normal winter, or both, gas would become scarce before the end of March 2023.

Even if Europe scrapes through this winter, inventories are likely to end at very low levels, requiring another, perhaps even bigger, restocking next year ahead of winter 2023/24.

Inventory accumulation has put Europe in a stronger position than at this time last year but regional supplies are still at risk which will require further action from the market and policymakers.

Supply security depends critically on the ability to reduce consumption well below prior year levels - irrespective of temperatures and the level of heating demand.

Related columns:

- Europe tops up gas stocks, but winter demand cuts essential (Reuters, Sept. 7)

- EU prepares public opinion for winter gas siege (Reuters, July 27)

- Europe forced to pay even higher prices to fill gas storage (Reuters, July 5)

- Europe fills gas storage at record rate as Asia's buyers step aside (Reuters, May 17)

- Europe makes rapid start on refilling gas storage (Reuters, May 4)

John Kemp is a Reuters market analyst. The views expressed are his own
Editing by Mark Potter

Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.

Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.

Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.

Usamos cookies para lhe dar a melhor experiência no nosso website. Ler mais ou alterar as configurações de cookies.

Aviso de risco: O seu capital está em risco. Os produtos alavancados podem não ser adequados para todos. Recomendamos que consulte a nossa Divulgação de Riscos.