The big storage draw: European storage withdrawals more than doubled yoy this heating season, meeting ~30% of European gas demand since December (vs 17% last year).
This has been largely driven by the plummeting LNG influx (down by 40% yoy), as flexible LNG flows have been increasingly diverted from Europe to northeast Asia, with the JKM-TTF spread widening to over $20/mmbtu by mid-January.
And this highlights the unique balancing role of European gas storage in the global gas market: Without its deliverability and reactivity, less LNG would have been available to northeast Asia further tightening the market (and potentially leading to effective gas shortages).
However, the big storage draw will have its consequences for the summer market: European storage levels are now almost 20 bcm below last year’s levels and just plunged below their 5-year average, which could mean more injection demand through the 2021 summer.
What is your view? Will we see LNG returning to the European market during summer time? LNG stocks in Asia are also heavily down and we could see more competition than expected…
Source: Greg Molnar
See original post by Greg at LinkedIn.