The coming gas summer must be fundamentally different from the one of 2020.
Europe’s storages are less than 30pc full in late Mar, for the first time in three years. Excluding 2019 and 2020, which stand apart with extremely high gas inventories, the regional UGSs became on average 86pc full at the end of 2014-18 summer periods. To reach that level, it would be necessary to inject about 60 bcm between Apr and Sept 2021. In comparison, the facilities were fed with 45 bcm during the six-month period of 2020.
Stronger injection demand offers more opportunities for LNG players that have been focused on westward loadings in the last two months. European LNG imports should reach a new record high in March and unlikely to run out of steam in the near term.
It would obviously be too simplistic to assume that prices in Europe will depend solely on these two factors during the summer, bearing in mind May-June maintenance works in Norway, shares of wind, solar and hydropower in electricity generation, gas vs. coal competition, etc. Nonetheless, it is LNG import dynamics and injection demand that will define the general market sentiment in the coming period.
Which one do you think will lead the game?
Source: Yakov Grabar
See original post by Yakov at LinkedIn.