Traders began withdrawing natural gas from record-high European inventories this week as the weather turned colder and demand for heating increased.
According to the European Union, gas storage facilities in the EU were 99.57% full as of November 8th. data From Gas Infrastructure Europe. Data showed that in recent days, most EU member states have continuously withdrawn small amounts of pure gas from their national storages. This is the first continuous net withdrawal from European gas reserves since April, the end of the previous winter heating season.
Temperatures could be below average in parts of Europe, which could accelerate the withdrawal this weekend, but temperatures are expected to return to normal or above normal in many countries next week. ing.
LSEG analysts expect temperatures in France and Germany could be 2-5 degrees Celsius above normal early next week, Reuters report on friday.
Last month was strong due to continued weak demand and forecasts for higher temperatures next week. Dutch TTF Natural Gas Futuresthe benchmark for European gas trading, plunged 3.8% as of 11:25 a.m. (Japan time) on Friday.
Despite stocks being nearly full, Europe is still not out of the woods. That’s because a cold winter and potential supply disruptions could push them into the red and cause prices to soar. Volatility is expected to continue as supplies from the Eastern Mediterranean could be threatened if the Hamas-Israel war escalates.
As quoted by Reuters, Energy Aspect analysts said: “The (Dutch) TTF near curve remains subject to a significant risk premium related to typical weather risks and concerns about escalating tensions in the Middle East. It is likely to be included.”
So far, European natural gas demand has remained weak since last year’s energy crisis, and much of the demand destruction is likely to be permanent, according to French utility giant Engie.
But analysts and industry experts told Bloomberg earlier this month that European gas demand could start to rise this winter as power consumption increases in major markets and the destruction in industrial demand in the euro area eases. Told.
Written by Tsvetana Paraskova, Oilprice.com