European Gas Storage Levels Hit Historic Lows as LNG Prices Soar

LNG prices have been surging amid low European inventories and fierce competition for spot supply between Europe and Asia, analysts and industry executives say.

The global market has tightened due to LNG supply from Qatar and the United Arab Emirates (UAE) still being mostly trapped in the Persian Gulf. This has sent prices in both Asia and Europe to their highest levels since the end of 2022.

Europe is heading into winter with one of the lowest levels of gas in storage in the past two decades, at less than 70% full compared to 82% for this time of year in 2015 and a five-year average of above 80%. This has led to intensified competition for non-Middle Eastern LNG supply.

Cederic Cremers, president of Integrated Gas at the world's top LNG trader, warned that 'Right now, where we stand in Europe is at a historically low storage level heading into the end of fall.'

Simon Flowers, chairman of energy consultancy Wood Mackenzie, predicts that if it were to be a colder-than-usual winter, LNG prices could jump from nearly $30 per million British thermal units (MMBtu) now to $40 per MMBtu, which would be equivalent to about $240 per barrel and bring demand destruction.