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Europe Faces Lowest Gas Inventories in 15 Years Ahead of Winter

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Europe is set to enter the upcoming heating season with its lowest gas storage levels in over 15 years, risking higher gas and electricity prices this winter.

Based on current trends, the region is set to end the critical gas restocking season, which typically runs from April to October, with inventories just 76% full, according to a report by Financial Times, citing leading energy consultancy Wood Mackenzie.

This is set to be the lowest peak for gas inventories across the region since 2011, when Gas Infrastructure Europe began tracking the data.

The low inventories were largely attributed to the military conflict in the Middle East, leading to the effective closure of the Strait of Hormuz, which accounted for one-fifth of global LNG flows.

Besides this, Europe began the refilling season with relatively depleted inventories, at just 28%, following an unusually cold winter. Inventories currently stand at 48.29%, compared to 57.77% last year, and the five-year average for this period at 62.9%, according to the Swiss Federal Office of Energy.

Meanwhile, the European Commission on Sunday reassured markets that gas storage at 80% of capacity was enough to secure supplies for winter, while noting that storage levels were roughly 10% below the pre-crisis average for this period, and that overall gas demand has dropped 17%.

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