Despite the return of winter weather in mid-January and the high withdrawal of gas from storage facilities, gas prices on European exchanges are not rising. EU countries are promised mild warming, while storage facilities are still full, experts say.
From January 16 to January 28, the storage stocks of the EU countries decreased by 8 billion cubic meters of gas. This is one and a half times more than in the first two weeks of January, and slightly less than the volumes consumed in December of 9.5 billion cubic meters.
The return of winter weather and the decline in green generation contributed to the growth in gas withdrawals.
Prices, however, did not respond to higher gas withdrawals. Today, gas supplies from the TTF exchange for a month ahead were sold at $650 per thousand cubic meters. The last time this price was fixed at the beginning of December 2021. In mid-December, the cost of gas in Europe was about $1,500 per thousand cubic meters. However, due to warm weather, it began to decline.
Deputy Director of the FNEB Alexey Grivach notes that so far there is a lot of gas in European storage facilities and the EU countries are “eating fat”. According to the GIE, on January 28 European UGS facilities were almost 74% full. There were 78 billion cubic meters – 38 billion cubic meters more than a year ago.
Obviously, in the eyes of the market, this seriously brightens up the current supply imbalance compared to last year. If daily LNG volumes in January are 60 million cubic meters more than in the first month of 2022, then Gazprom’s supplies fell by 170 million cubic meters.
The weather forecast can also give confidence to the market. Forecasters predict that instead of frost, a slight warming will come to cold Europe – by several degrees.
As reported EADaily , warm winter allows the EU to pass the heating season without accidents. However, the next heating season will depend on the remaining reserves in storage. And large deliveries of Gazprom, as it was before July 2022, will no longer be. The International Energy Agency predicts that the gas shortage in the EU could reach up to 57 billion cubic meters this year and urge to continue reducing gas consumption. Despite the fact that prices have not returned to pre-crisis levels. They are still 2-2.5 times higher.
