The European gas market is currently experiencing a shift, with a decrease in the risk premium associated with stable Russian gas supplies.
TTF futures have dropped below €45/MWh, reflecting a resilient market despite uncertainties surrounding Russian gas exports. Analysts predict prices will fluctuate within the low to mid €40 range for the rest of the winter season, indicating market stabilization.
European gas storage levels stand at 81%, aligning closely with the five-year average but 10% lower than last year. Net withdrawals from storage have increased due to colder temperatures and a decline in LNG imports. Forecasts suggest storage levels could reach the low 40% range by the end of winter, 15% below this year's levels but still 8% above the five-year average.
Gas demand in Europe increased by 3% in November, primarily due to colder weather conditions. The electricity sector has increased its gas consumption, while industrial demand rose by 15% month-on-month.
Pipeline gas imports to Europe remained stable in November, with Norwegian gas deliveries holding steady and Russian gas imports experiencing a slight decrease. The outlook for European gas supply remains complex, influenced by geopolitical factors and market dynamics. The stability of Russian gas supplies is crucial, and the interplay between demand, storage levels, and import dynamics will shape the gas market landscape.
The increase in gas consumption due to colder weather and reduced LNG imports highlights the importance of maintaining robust supply chains. The resilience shown in recent months indicates potential stability in the European gas market, but various factors will continue to shape the market as it moves through the winter season.