Russia halted gas supplies to Austria’s OMV (OMVV.VI), opens new tab in mid-November amid a contractual dispute and legal wranglings related to interrupted gas supplies in 2022.
Despite the stoppage, overall Russian gas exports via Ukraine, which account for just under half of Moscow’s total gas flows to the continent, have remained stable as other buyers stepped in.
Dropping temperatures in the United States and Europe have prompted a rally in U.S. natural gas prices. Although somewhat hesitant, this rally could help avoid a shortage in the not-too-distant future.
Europe is depleting its natural gas reserves at the fastest rate in six years as still winter weather and low temperatures combine to challenge the continent’s transition away from hydrocarbons—and delay it.
Europe’s gas inventories have depleted at the fastest rate for eight years, as the region has experienced repeated bouts of colder-than-normal temperatures and low wind speeds since the start of the winter heating season.
Russia halted supply to Vienna-based energy company OMV over contractual dispute in mid-November, but overall gas exports to Austria have remained stable as other companies have stepped up their purchases.
Europe has stepped up imports of liquefied natural gas in recent weeks, especially LNG from the United States, where the benchmark gas prices at Henry Hub are significantly lower compared to the European benchmark, the Dutch TTF Natural Gas Futures.
The only silver lining is that EU gas storage is pretty much full for the winter, and meteorologists are predicting a mild one.
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November normally marks the start of the heating season proper in most of Europe. This year has been no exception—and gas demand is set to surge in the final months of the year to make up for lost solar and likely wind generation.
For the first time in ten months, Europe’s imports of liquefied natural gas rose in October from the previous month as it moved to fill its gas storage sites for the winter in which the transit deal for Russian pipeline gas flows via Ukraine expires.