European gas prices plateau with storage refill

Gas prices for delivery at the Dutch hub, the Title Transfer Facility, have plateaued from now until the end of next winter, according to market data, crushing the summer-winter price difference. This is the storage paradox, where the need to buy gas for storage injection pushes the summer gas price up, while the winter price does not move so much.

Storage injections have been rising as the average European facility is only 40% full according to Gas Infrastructure Europe data, leaving the market doubtful if the facilities will be full enough, when next winter starts, to keep prices stable.

Before the start of the withdrawal season late last September, Dutch hub prices were at about €12.85/MWh for summer (Q2+Q3) 2021 delivery and €15.20/MWh for winter (Q4 2021-Q1 2022) delivery. By early January, these prices had risen sharply while preserving a slightly reduced premium for winter: Q3 2021 was trading at €16.7/MWh while winter was at €18.20/MWh.

But this week prices have closed almost flat: Q3 2021 traded at €26.4/MWh, Q4 traded at €26.80/MWh and Q1 2022 at €26.90/MWh. Delivery for the remaining three weeks of this month are marginally lower at €25.80/MWh. Storage injections June 6 were almost half the daily capacity, the highest proportion seen in years, although at 39.6% there was a fractionally lower capacity filled (39.6%) on the same date in 2018.