Europe's Gas Storage Levels Leave Winter Supply at Risk

Europe is heading into its most difficult winter gas season since 2022 due to high wholesale prices and low storage levels. In the Netherlands, household bills could climb quickly, while in Germany and Austria, it may take almost a year for full adjustments to be made.

The benchmark Dutch front-month TTF contract was trading above EUR66 per megawatt-hour (MWh) on Tuesday, easing from over EUR68 earlier in the session. This is higher than the roughly EUR29/MWh at the start of the year.

Natasha Fielding, editorial manager for gas, LNG, coal and biomass at Argus Media, said that EU storage levels remain unusually low for this point in the year, with only 62.99% full as of August 24th. This is far below the five-year average of 79%, with the only comparable period being 2021, just before the last major gas crisis.

Germany's storage was only 51% full, while the Netherlands had 44.3%. Oxford Economics reported that EU gas consumption is roughly 15%-20% lower than in 2021 and argued that the EU can manage with lower storage levels but would require heavier reliance on winter LNG imports.