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OPEC+ Can Stop An Oil Rally To $100

OPEC+ Can Stop An Oil Rally To $100

The OPEC+ group could influence…

Europe Taps Record-High Natural Gas Storage As Temperatures Drop

Traders have begun withdrawing natural gas from Europe’s record-high inventories this week as the weather turned colder and heating demand rose.

The gas storage sites in the EU were 99.57% full as of November 8, according to data from Gas Infrastructure Europe. In the past few days, most EU countries have made consecutive small net withdrawals of gas from their storage, the data showed. These were the first consecutive net withdrawals from Europe’s gas storage since April—the end of the previous winter heating season.  

Withdrawals may accelerate this weekend as some parts of Europe could see lower-than-normal temperatures, but next week many countries are expected to return to typical or above-normal temperatures.

LSEG analysts expect temperatures in France and Germany could be 2-5 degrees Celsius higher than normal at the beginning of next week, Reuters reported on Friday.

Continued weak demand and forecasts for higher temperatures next week sent the front-month Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, plunging by 3.8% as of 11:25 a.m. GMT on Friday.

Despite the nearly full inventories, Europe is not out of the woods yet as a cold winter and potential supply disruptions could tip the balance into deficit and send prices soaring. Volatility is expected to continue, also because of the threat to supply from the Eastern Mediterranean in case of a flare-up in the Hamas-Israel war.

“The (Dutch) TTF near curve will still likely carry a substantial amount of risk premium related to the typical weather risks and concerns over tension escalation in the Middle East,” Energy Aspects analysts said, as quoted by Reuters.

For now, Europe’s natural gas demand continues to be weak after last year’s energy crisis and most of the demand destruction will likely be permanent, according to France’s utility giant Engie.


But analysts and industry professionals told Bloomberg earlier this month that Europe’s gas demand could begin to rise this winter with higher electricity consumption in major markets and easing industrial demand destruction in the Eurozone.

By Tsvetana Paraskova for Oilprice.com

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