Tanks for gas storage being filled, with increased supply coming from Norway, causing a drop in gas prices.
Europe is witnessing a gradual alleviation of concerns surrounding future gas supplies, with strong inflows of liquefied natural gas (LNG) playing a significant role, according to a report by Bloomberg.
The resumption of injections at Rehden, Germany's largest gas storage facility, on September 24, marks a positive step towards filling European gas storage facilities. This follows a 12-day pause, and the subsequent increase in storage levels at Rehden from 74.63% to 74.92% on the same day, offers a glimmer of hope.
Germany's gas storage levels, as of September 24, stand at 91.02%, nearing the federal government's target of 95% by November. This progress, coupled with the success of measures to combat the gas crisis, including well-filled storage, LNG terminals, and a functioning ancillary services market, among others, has led to a relaxed atmosphere in the gas futures market in Europe. Gas prices have nearly halved from their August peak.
However, the situation remains delicate. Major gas consumers are seeking additional LNG supplies, but many export facilities are already fully booked. If temperatures drop unexpectedly quickly, increasing gas demand for heating, and if subsequent gas storage levels do not continue to rise, it could signal a turning point for the gas futures price.
The resumption of pipeline deliveries from Norway, after seasonal maintenance work, is another positive development. Traders are now focusing on weather forecasts and the response of energy demand given the limited gas supply.
In a significant move, German Chancellor Olaf Scholz secured a single delivery of super-cooled fuel from the United Arab Emirates for a new floating terminal in Brunsbüttel near Hamburg. More shipments could follow next year, but this is initially a non-binding agreement.
Klaus Müller of the Federal Network Agency tweeted about the success of these measures, emphasizing that private heating behavior and the situation with neighboring countries will play a significant role. He highlighted the well-filled storage, LNG terminals, French gas on track, a functioning ancillary services market, and appeals for savings as key contributors to the current improvement.
Abundant LNG supplies are helping countries fill their inventories well ahead of the heating season. Despite this progress, it is crucial to remain vigilant and continue implementing measures to ensure a stable gas supply for the upcoming winter months.
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