Europe's gas storage is 90% full, but this still may not be enough

However, inventories weren’t meant to provide all of the region’s winter gas supplies, and a storm of risks is brewing. Potential worker strikes in Australia threaten to tighten the global market for liquefied natural gas. Europe is still coping with lower flows from Russia amid the war in Ukraine. And, prolonged outages in Norway recently have led to price spikes, a reminder of the market’s fragility.

In other words, Europe’s energy crisis isn’t over yet. Benchmark Dutch futures are headed for a third weekly gain on continued supply concerns, while fluctuating Friday.

The continent’s energy security “is in a much more stable position than it was this time last year,” European energy commissioner Kadri Simson said in a statement yesterday.

But we have seen in recent weeks that the gas market remains sensitive.

The region’s winter season for gas formally runs from October through March. Storage can cover up to one-third of the EU’s gas demand in the heating season, according to the European Commission. But much depends on weather conditions as freezing temperatures could accelerate withdrawals from underground stockpiles.

Gas inventories also vary by country. Nations including Germany, the Netherlands, and Spain have already exceeded the EU’s target. France is among outsiders with storage levels at about 84%, after its energy supplies were disrupted earlier this year by nationwide strikes.

While European gas prices are about 90% lower than their crisis peaks last year, market nervousness and intense volatility are here to stay given that global supplies remain tight.

Germany has already warned that shortage risks will remain until early 2027 unless it adds more gas infrastructure. Next year’s market balance will depend on how much fuel will be left in storage.

• Bloomberg