Europe's Gas Storage Refill Delayed Amid El Niño Risk

Europe's natural gas storage refill is running behind pace, raising concerns about El Niño's potential impact on global energy markets.

The margin between natural gas futures in Europe and Asia has tightened due to warmer forecasts across both continents. This increased demand for natural gas is putting pressure on Gulf Coast cargoes, which are being pulled tight by the thin European storage situation and Middle East supply risks.

Swedish and Finnish nuclear power plants, which provide around 60% of their combined capacity, have been running at near full capacity to meet the surge in demand. Meanwhile, the odds of El Niño occurring this year have risen above 90%, according to forecasters, with significant implications for global energy markets.

The situation has resulted in Europe outbidding Asia for flexible cargoes, further tightening the market and driving up prices.