ING: Thin European Gas Storage Underpins Price Stability Ahead of Winter

ING’s senior analyst Warren Patterson notes that European natural gas futures have risen above EUR70/MWh, driven by reduced LNG shipments from the Persian Gulf and robust spot demand in Asia, which together cut EU LNG imports by roughly 16% year‑on‑year from April through July. As a result, EU gas storage stood at about 65% capacity at the end of August, well below the five‑year average of 82%, with inventories expected to reach only 72–73% when the heating season begins, which could force a faster‑than‑usual replenishment pace and limit any downside price pressure.

Low storage supports gas prices

European gas prices have recently topped EUR70/MWh, the highest level since March. The contraction in Persian Gulf LNG output has tightened the global market, and heightened spot buying in Asia has pushed EU LNG imports down roughly 16% year‑on‑year over the April‑July period. However, freight economics now favor routing spot shipments to Europe, suggesting that imports should begin to stabilize and post month‑on‑month gains.

Delayed injections left EU storage at roughly 65% capacity by the end of August, compared with a five‑year norm of 82% and below the levels recorded in 2021. Our balance sheet indicates that stockpiles are likely to reach only 72–73% when the heating season commences, falling short of the official 90% target and possibly dipping below the flexible 75% threshold.

Consequently, several member states may need to ramp up purchases ahead of winter, providing a price floor. The low storage level caps the downside risk for European gas prices across all of our Persian Gulf supply scenarios.

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