EU enters winter with lowest gas storage of the 2020s as TTF rises to €88.42

EU gas storage stood at 71.6% full on Nov. 11, with Germany at 58%, as the bloc entered the heating season well below its five-year average — its lowest inventory of the 2020s.

Rystad Energy's winter LNG outlook, published this week, stops short of predicting a further rally in prices, which have already pushed Asian spot LNG above $30 per million British thermal units. The consultancy lays out as many ways for prices to fall as to rise and tells buyers to plan for a wide range of outcomes rather than one base case.

The International Energy Agency modeled a cold winter combined with continued disruption in the Strait of Hormuz and found EU storage could fall below 10% of working capacity by the end of March, S&P Global reported. A late cold snap would land when withdrawal rates, which slow as sites empty, are least able to respond.

Rystad expects Europe to pay up to keep US cargoes from being pulled toward Asia, where the loss of Middle Eastern supply has buyers chasing the same Atlantic LNG. Asian demand is less eager than the price suggests: Rystad expects a mild winter in Northeast Asia, where LNG at $30 discourages gas burning and boosts coal use. Bernstein calculated that a super El Niño would cut Japan's winter heating demand by 19% but its LNG consumption by only 2%.

European gas has risen for three sessions, with front-month TTF up 2% to €88.42 per megawatt-hour on Thursday morning.

October was both the busiest month for LNG tankers leaving Hormuz since February and the worst for attacks on shipping since the war began. S&P Global Energy tracking counted 31 laden LNG tankers exiting the strait, up from 23 in September, while the Washington Institute for Near East Policy counted 37 ships struck over the same month. Kpler data put Qatar's October exports just above 2.7 million tons, against nearly 6.2 million in February. QatarEnergy said in March that Iranian attacks had cut 17% of its export capacity and has since extended force majeure through at least the end of December.

Supply from outside the Gulf has made up about two-thirds of the lost Qatari and UAE volumes since March, the IEA said, yet global LNG supply is still headed for a 3% drop this year, the steepest on record. Transits stabilised in October, according to Rystad, and could allow a supply recovery by the second quarter of 2025, but output is "one escalation away from cratering again."

Diplomacy offers little to lean on. Iran's top security official, Mohsen Rezaei, has denied that talks with Washington are under way and said Tehran will not let enriched nuclear material leave the country. The IEA puts cumulative LNG supply losses from 2024 to 2026 at 150 billion cubic meters, equal to 15% of the new supply expected globally over that period.