Natural gas: Europe faces tighter winter balance – ING

ING’s Warren Patterson and Ewa Manthey report European natural gas prices have bounced higher as Middle East tensions disrupt Qatari LNG exports. They flag QatarEnergy’s extended force majeure, reduced EU LNG imports and below-average storage levels. With heatwaves complicating injections, they expect tighter-than-usual storage at the start of winter and elevated gas prices with potential spikes through the heating season.

European gas storage lags seasonal norms

"European natural gas prices have also bounced higher this morning, following the renewed tensions in the Middle East. The European gas market is looking increasingly vulnerable as we head into the winter."

"QatarEnergy has reportedly extended its force majeure for buyers in Asia and Europe to as far as the end of September. There have also been reports of QatarEnergy looking to subcharter an LNG carrier until the end of October, given the ongoing disruptions to Qatari LNG exports."

"EU LNG imports are on track to fall a little more than 25% YoY in July, which is making the job of refilling storage more difficult. EU gas storage is 56% full at the moment, below the 10-year seasonal average of 72%. Heatwaves across Europe will only add to the difficulty in filling up storage ahead of the winter."

"Tighter-than-usual storage at the start of the heating season suggests that gas prices will remain elevated through the winter, with the risk of spikes higher."