Is Europe suddenly winning the gas war with Russia?
Prices dropped 65% since August peak
Storage caverns are filled
Even seaborne LNG tankers are now so plentiful there are traffic jams forming outside European terminals as they wait to unload.
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2.
Most traders will cautiously concede that Europe’s fortunes have improved.
But a heavy note of caution still hangs in the air. Daring to believe that the energy crisis has somehow been resolved is dangerous given the scale of the remaining challenge.
3.
Europe could quickly burn through its gas reserves, potentially leading to extreme tightness after Christmas.
Gas at around €115 per MWh is still equivalent to almost $180 a barrel in oil terms.
Contracts in December and January are above $230 a barrel equivalent.
4.
5.
Weather’s dominance over the EU gas market means he’s not quite prepared to say the worst is definitely over.
However, if the winter is mild, then Germany, EU biggest economy, could end the season with its storage facilities almost half full.
6.
But if it is just slightly colder than normal, then “German gas inventories would be virtually depleted by end-March, possibly requiring late winter rationing or supply cuts”.
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