EU Barely Meets Gas Storage Target as Restocking Challenge Looms

Europe barely met its February target for natural gas inventories, with some nations missing their thresholds as supply concerns linger. 

Among the biggest energy consumers in the region, France’s gas storage was 35.5% full as of Feb. 1 compared with a goal of 41% set by the European Commission. The European Union’s executive arm considers countries that miss targets by five percentage points or less to be in compliance. 

Overall, EU storage sites were about 53% full at the beginning of this month — the lowest for this time of year since 2022 — compared with the commission’s target of 50%.

Traders are closely watching storage levels amid fears that the market could tighten this summer as Europe needs more gas to replenish its depleting inventories. That makes restocking a challenge ahead of next winter, especially as summer gas contracts are trading above those for the following heating season. 

Both near-term and summer futures surged recently. Benchmark contracts fluctuated on Monday after reaching a fresh 15-month high.

The summer premium — which makes stockpiling uneconomical — even widened after Germany’s gas market manager last month revealed subsidy proposals to encourage storage injections. 

The 27-nation bloc agreed on binding storage targets at the height of the 2022 energy crisis. The EU’s underground storage caverns are designed to buffer the region from unexpected demand surges or supply disruptions during the coldest periods.

While there hasn’t been a case so far of a member state being punished for missing the goals, “a substantial and sustained deviation” could lead to the European Commission taking measures.

“The security of supply of the country for this winter is in no way jeopardized,” according to the press office for France’s industry and energy ministry. 

Some EU members calculate a separate lower target that accounts for certain exemptions — based on domestic gas usage or exports to other countries — though not all make the numbers public. For the Netherlands, for example, that Feb. 1 threshold was 39% compared with the European Commission’s goal of 47%, according to the nation’s data. Its storage was 37.1% full. 

Other countries that have exemptions include the Czech Republic, Hungary, Latvia, Slovakia and Austria. The latter calculates its target at 24.9%, compared with 64% published by the European Commission, according to Austrian energy market regulator.

Dutch front-month gas, Europe’s benchmark, traded 0.1% lower at €53.18 a megawatt-hour by 9:13 a.m. in Amsterdam. It jumped as much as 3% earlier Monday, following oil higher as US President Donald Trump ramped up his tariff threats against global trade partners.

Source: By Elena Mazneva, Francois de Beaupuy from Rigzone.com