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EU Gas Market Prone to Volatility Amid Winter Cold Risks: WoodMac

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Winter European gas markets remain finely balanced and prone to volatility despite storage levels 96% full and around 2bcm available from gas stored in Ukraine according to Wood Mackenzie.

  • Normal weather is forecast to drive demand 13bcm higher than winter 22/23 with lower EU LNG availability from limited supply growth and increasing Asian demand.
  • End of heating seasons storage levels are expected at 47% full compared to 55% last year and the 5-year average of 35.3%.
  • An extremely cold winter such as 2011 would drive demand more than 20bcm higher across Europe risking end of winter storage levels as low as 26% and prices well above 20$/mmbtu.
  • Limited supply availability risks from cold weather and supply uncertainty are incorporated into current forward prices. Warmer than normal winter predictions in Asia and Europe due to El Niño could lower prices below the current winter average of 15$/mmbu.
  • End of Oct 2024 storage is forecast at 96% with similar supply to 2023 but potentially 14bcm lower demand due to 60GW of new solar/wind capacity and a rebound of French nuclear production.
  • Renewed pressure is expected in 2025 with less LNG availability for Europe in 2025, compared to 2024 and after the expected halt to Russia gas transit flows through Ukraine.
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Winter European gas markets remain finely balanced and prone to volatility despite storage levels 96% full and around 2bcm available from gas stored in Ukraine according to Wood Mackenzie.

  • Normal weather is forecast to drive demand 13bcm higher than winter 22/23 with lower EU LNG availability from limited supply growth and increasing Asian demand.
  • End of heating seasons storage levels are expected at 47% full compared to 55% last year and the 5-year average of 35.3%.
  • An extremely cold winter such as 2011 would drive demand more than 20bcm higher across Europe risking end of winter storage levels as low as 26% and prices well above 20$/mmbtu.
  • Limited supply availability risks from cold weather and supply uncertainty are incorporated into current forward prices. Warmer than normal winter predictions in Asia and Europe due to El Niño could lower prices below the current winter average of 15$/mmbu.
  • End of Oct 2024 storage is forecast at 96% with similar supply to 2023 but potentially 14bcm lower demand due to 60GW of new solar/wind capacity and a rebound of French nuclear production.
  • Renewed pressure is expected in 2025 with less LNG availability for Europe in 2025, compared to 2024 and after the expected halt to Russia gas transit flows through Ukraine.