European Gas Storage at 94% but at Industrial Detriment

European gas storage nears 94% according to GIE data but demand destruction is mainly hitting industry rather than domestic use and is unevenly distributed throughout the region.

• Gas use by EU nations dropped 14% in August compared with the 5-year average, while September hit the bloc target of 15% according to Eurostat data.
• The majority of the drop in demand has come from industry with price caps largely shielding domestic consumers while warm weather has prevented excess heating demand.
• The drop in European gas use has been unevenly distributed amongst nations.
• Germany cut its gas consumption by 28% in August and 7.4% in September, while Italian gas use dropped by 22% in September and Dutch gas use by nearly a third.
• Meanwhile, Spain increased its gas use both months, with exemptions from targets because of excess LNG import capacity. They are currently dealing with a glut of LNG supply greater than its regasification capacity.
• European industrial output has been hammered by the cuts, in particular the fertiliser and steel producing sectors. Keeping low gas use for these industries does not form a tenable long-term solution for European nations because of the knock-on effect for wider domestic and global economies.
• After a sustained fall, European gas prices have staged a partial recovery through the tail end of this week - TTF NOV 22 up 3.4% at 111€/MWh.