Europe could end winter with better-than-expected natural gas storage levels because of unseasonably warm weather across the energy-stricken continent in October and November. Traditionally the heating season should be well underway, but above-trend temperatures have allowed NatGas storage facilities to be near full without any significant draws.
At one point this morning, front-month Dutch TTF futures slid as much as 10.2%, compounded with an 8.2% decline on Wednesday, following a new report from Maxar that forecasted above-normal temperatures in Scandinavia and southwest Europe next week.
Northwest Europe is expected to see above-average temperatures through the end of the month.
As well as South East Europe.
Germany, the EU’s largest economy and most addicted to NatGas, will also see above-average temperatures through the end of the month.
France has the second-largest economy in the EU and will experience similar warmer weather patterns.
“Traders are keeping a close eye on weather trends as Europe’s gas storage is almost full, which should serve as a buffer for the winter,” Bloomberg said.
Seasonally, EU NatGas storage is well above a 12-year trend.
But as we all know, it’ll take one cold snap to boost heating demand which would mean inventories would start drawing down.
Countries across Europe have been preparing for possible blackouts and energy rationing this winter. The energy crisis has yet to be resolved because no new supplies have been able to offset what was lost from Russia. EU countries have only been able to reduce energy consumption among households and businesses.
Russian energy Gazprom PJSC warned last month that “whole towns and lands, god forbid, will freeze” if Europe is hit with one week or more of abnormally cold temperatures.