Germany lags EU neighbours in gas storage refill as winter begins

what happened

Germany, which holds more than a fifth of the EU's gas storage capacity, has started winter with its lowest gas stocks on record, well below the EU average. The Iran conflict has pushed gas prices to a four-year high, and traders see little reason to store gas when the summer profit is thin.

According to Gas Infrastructure Europe, German storage was 61.05% full on November 2, against an EU average of 74.56% and a German target of around 70% for the start of the month. Raiffeisen analyst Aaron Alber, quoted by Reuters, said Germany could exit the winter with storage at 20 to 25%.

Poland, by contrast, has near-full storage at 99% of capacity. Warsaw will open a new facility this month that adds 25% to its capacity. On Friday, Germany rejected accusations from Italy that it had deliberately left its stores under-filled to cut costs for gas importers ahead of their privatisation.

why it matters

Low German stocks support European gas prices, since weak storage makes the market more sensitive to cold weather and LNG supply disruptions. The risk of shortage in Europe's largest economy keeps a premium in prices.

market impact

European gas: weak German storage supports TTF prices

• ▲TTF (European gas) pressure up — low stocks and winter shortage risk support the price
• ▲LNG pressure up — Europe may need to buy more liquefied gas to refill storage

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