Commerzbank’s Thu Lan Nguyen highlights that German gas storage is only about 25% full, far below past norms, but an outright shortage this winter is still seen as unlikely thanks to flexible LNG imports. However, persistently low storage incentives mean inventories may not reach 90% before next heating season, increasing the risk of winter shortages and price volatility.

Flexible LNG offsets but risks build

"At the beginning of February, gas storage levels in Germany are lower than they have been for a long time. A shortage is unlikely, as the current cold weather would have to continue well into March and suppliers could counteract this with higher imports of liquefied natural gas."

"However, gas storages are likely to be less full in the coming years than in previous years, which will increase the risk of shortages in winter and probably cause prices to fluctuate more."

"As a result, storage facilities are unlikely to be filled to the actual target level of 90% at the start of the new heating period in the course of this year. In fact, the starting position next winter could be even worse than this season."

"If gas storage levels were to fall to critical levels in such cases, European suppliers would be forced to purchase gas at significantly higher prices on the spot market and/or restrictions on consumption would be necessary."

"These would then primarily affect industry in order to protect private households."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)