European Gas Storage Fails to Fill Buffer Ahead of Winter

European gas storage is facing an uphill battle to fill its buffer before winter. According to Goldman Sachs, Northwest European LNG imports fell short of expectations in July by a significant 21 million tonnes per annum (mtpa). This shortfall reflected roughly 7 mtpa less global LNG supply than anticipated, mainly from Russia and Qatar, alongside Asian LNG imports running around 15 mtpa above expectations.

The result was that fewer molecules reached Europe, and storage rebuilding fell behind schedule. Northwest European inventories finished July at around 43% of capacity compared with Goldman's 45.5% expectation.

Samantha Dart, co-head of Global Commodities Research at Goldman Sachs, argues that actual Persian Gulf LNG exports and the speed at which European storage can be rebuilt are more important variables than headlines around a potential reopening of the Strait of Hormuz.