BAKU, Azerbaijan, March 3. Colder weather in March is not expected to significantly change the EU gas storage balance, Trend reports with reference to the Fitch Solutions.
The latest report from Fitch Solutions reveals that Europe continues to benefit from near-term expectations for ample supply availability and high levels of natural gas in storage.
“European natural gas storage remains well elevated at 61 percent of total, about 34 percent higher than the 5-year average storage level at this same time. A cold end to Winter in Europe during March is not expected to tilt the storage balance significantly lower adding to the downside pressure faced by prices,” reads the report.
Fitch Solutions expects to revise its average annual price down as a result of weak prices across the start of the year and expectations for strong LNG imports to continue despite risks of a resurgence in Chinese energy demand later in the year.
“A prolonged winter and return in natural gas demand pose an upside risk to prices, as recent declines entice users to consume. Dutch TTF prices are currently trading at EUR48.5/MWh and UK NBP prices are at GBp121/therm,” reads the report.
EU countries have agreed on increasing gas reserves in the short term, in order to secure sufficient supply for Europeans. To this end, EU countries, within the Council, adopted a regulation in June 2022 to ensure that storage capacities in the Union are regularly filled before the colder months and can be shared across the Union, in a spirit of solidarity.
The regulation provided that underground gas storage on member states’ territory must be filled to at least 80 percent of their capacity before the winter of 2022/2023 and to 90 percent before the subsequent winter periods.
The regulation has been swiftly implemented. In September 2022, the EU had its storage facilities filled by 80 percent on average. In October 2022, filling level reached 90 percent. In December 2022, gas reserves started to be used up due to the weather, but as of January 2023, the filling level remains above 80 percent.
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