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Europe will enter the winter heating season with record natural gas inventories again, potentially avoiding soaring EU prices and another energy crisis next winter, analysts said.
Gas storage facilities in the EU were 59% full as of March 25, one week before the end of the big gas recovery season on March 31, according to data from Gas Infrastructure Europe.
The amount of storage space that is 100% completely full is only about a quarter of EU consumption in the winter, but high stock levels at the start of the April refilling season mean that Europe will once again reach the target ahead of schedule. It will be easier to do. It is expected to be 90% full by November 1st.
But this year could be the last year for Russian pipeline supplies to pass through Ukraine, as a multi-year transit agreement ends on December 31. Both Ukraine and the EU have indicated they will not extend the transit agreement, a move that has some EU member states in Central Europe concerned. Countries such as Austria and Slovakia are among the most vulnerable when it comes to gas supplies.
Austrian Energy Minister Leonor Gewessler said last month that the country was seeking to reduce its dependence on Russia, including by calling for the end of Austria-based energy giant OMV’s long-term contract with Gazprom.
“Our goal is to get rid of Russian natural gas. As a sovereign nation, we cannot tolerate this dependence. The proportion of gas imports from Russia is increasing, not decreasing,” Gewessler said.
Europe’s benchmark natural gas prices fell in February thanks to full storage for the 2023/2024 winter, warm weather and steady inflows of LNG, leading to Russia’s invasion of Ukraine in February 2022. It was the lowest price in three years, below the previous level.
Wood Mackenzie said in a report earlier this month that European gas prices could fall to $6.70 per million British thermal units (MMBtu) this summer, thanks to a warm winter and abundant gas stocks.
Dutch TTF futures, the benchmark for European gas trading, are expected to be in the range of $31-40 (29-37.50 euros) per megawatt hour (MWh) next winter, according to six analysts polled by Reuters. It is expected that By comparison, Wednesday’s April futures price was around $29 (€26.87) per MWh (equivalent to about $8 per MMBtu) and winter 2024/25 was around $33.87 (€31.32) per MWh.
Written by Charles Kennedy, Oilprice.com
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