Global LNG Market Faces Winter Strain Amid European Storage Lows and Hormuz Tensions
The global liquefied natural gas (LNG) market is bracing for potential strain this winter due to low European storage levels and persistent restrictions in the Strait of Hormuz.
The European Union's storage fill rate stood at around 67% as of September 8, with a separate analysis putting it closer to 69% when including non-EU countries.
Much of this gap can be attributed to differences in observation date and geographic coverage rather than a divergence in filling trajectory.
The European Commission has encouraged member states to use flexibilities under the gas storage framework, aiming for a level deemed sufficient, around 80%, when market conditions justify it.
The current market structure, characterized by backwardation, is also hindering injections. Private operators have less incentive to build storage in the absence of public support or an anticipated price reversal.