European Natural Gas Prices Strained by Tight Supply and Low Storage

Natural gas prices in Europe are currently under strain due to tight supply and low storage levels.

According to Commerzbank's Norman Liebke, European natural gas remains structurally tighter than oil due to several factors.

The cut-off of Qatar LNG exports and the redirection of US cargoes to Asia have exacerbated the situation.

Historically low storage levels are a major concern, with current levels 17 percentage points below the five-year average.

The European Commission relies on LNG imports during the winter months, which poses corresponding price risks, especially given the expected El Niño-driven increase in Asian gas demand.