European storage facilities now 45% full

European gas traders are continuing to inject gas into storage as fast as they can, keeping benchmark hub prices for summer delivery almost uniformly high until next summer. Data published by Gas Infrastructure Europe show 506 TWh is now stored across the Europe, meaning that 45.4% of the capacity is filled.

The less gas in store by the start of the withdrawal season – generally some time in October – the greater the risk of a price surge, so traders are paying as much or even more now for gas as they are paying for gas for Q4 2021 and Q1 2022. Prices have risen further this week, with balance of month closing June 24 at €32.12/MWh at the Dutch Title Transfer Facility, while the weekend – normally discounted as demand is less – is only marginally lower at €32.05/MWh.

This is higher than prices for the rest of the summer. Balance of month closed June 22 at €31.01/MWh, according to one trader NGW spoke to that day. The trader said that the risk of paying €40/MWh or more next winter was driving the price up now. Relief from the high prices is almost a year away as summer 2022 is around €20/MWh.

There is a lot of upside uncertainty to the price in the market: for example, how much gas Russian Gazprom will be willing or allowed to supply through Ukraine and Nord Stream 2 – assuming it is commissioned – and how high gas demand will be in Asia, which is now the main attraction for spot cargos and a major influence on European hub prices.

Ukraine's giant storage facilities are also filling up but not so quickly: they are now about 36.5% full, with 117 TWh ready for the winter. Traders have booked capacity there on Ukraine's favourable customs warehouse terms, as long as the gas is withdrawn within a few years of injection.