The beginning of 20/21 gas winter in Europe differs largely from what the market was going through in early October last year.
This month’s cold snap in NWE and the limited sendout from LNG terminals, accumulating much lower volumes than a year before, have meant that Germany, France and Netherlands showed net withdrawal from their UGS, amounting to about 400 mcm in the first three weeks of October. A year ago, there was net growth of inventories by almost the same amount.
The other difference is that, given the profitability of LNG sales in Asia this winter, the amount of westward deliveries is expected to be considerably less than during the October 20 – March 21 period. Imports to Europe could fall by 10-15pc YoY, if not more.
However, there is one point in that context which remains unchanged at the start of a new gas year. It is the uncertainty when it comes to weather in the following months. Depending on what temperature settles in Europe, the demand can change from subdued to strong which will determine whether or not the region starts the summer with abundant inventories. Covid can certainly play its part but in case of extended cold waves even the pandemics will have to take a back seat.
Source: Yakov Grabar
See original post on LinkedIn.