(MENAFN) The latest report from the Gas Exporting Countries Forum (GECF) suggests that the European natural gas market is poised to experience downward pressure on spot prices, primarily attributed to the high level of natural gas storage across the continent and the forecast of a warm winter ahead, which is anticipated to curtail demand.
As the 2023–2024 winter season commenced, Europe boasted a substantial natural gas storage capacity, reaching 99 percent. This surplus was further emphasized by an excess of 25 billion cubic meters of gas compared to targeted levels. Throughout the winter, only 42 billion cubic meters of natural gas were withdrawn from storage, marking the second-lowest utilization in the past decade. This trend was largely influenced by diminished heating demand attributed to the region experiencing its warmest winter in 12 years.
Consequently, the conclusion of the winter season left an unprecedented 61 billion cubic meters of gas in storage, representing the highest level ever recorded at the end of a winter season. Looking ahead to the upcoming winter, the GECF anticipates favorable conditions in the European market, with gas storage nearing maximum capacity. This scenario implies a modest requirement of only 40 billion cubic meters for net gas injection during the forthcoming summer season. Such minimal injection needs are expected to foster increased stability in both regional and global gas markets, exerting downward pressure on spot prices.
The report underscores the critical role played by gas storage in maintaining supply-demand equilibrium, particularly during peak consumption periods. It highlights the capacity of storage facilities to offer supply flexibility, thereby mitigating potential supply disruptions and volatility in prices.
The evolution of gas storage dynamics in Europe is notable, with levels reaching their maximum capacity more frequently in recent years. By the end of 2022, Europe's natural gas storage capacity had expanded significantly to reach 104 billion cubic meters, signaling a notable shift in the region's energy landscape and its implications for market dynamics.
MENAFN28042024000045015839ID1108147439
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.