Gas storage in Europe has fallen at the fastest pace in eight years, driven by cooling temperatures and weaker winds.
The rapid depletion has raised concerns about potential gas shortages and higher prices, especially as the continent enters its peak winter season.
This has been exacerbated by low wind speeds, which have reduced power generation from wind farms and increased reliance on gas-fired plants.
Europe has been experiencing a streak of below-normal temperatures and low winds since the start of the winter heating season, leading to the fastest depletion of gas stocks in eight years.
Between October 1, when winter officially began, and November 26, a total of 83 terawatt hours (TWh) of electricity was stored underground in the European Union and the United Kingdom.
Gas stocks have fallen more than four times faster than average over the past decade and by the largest percentage point in any year since 2016, according to operator data compiled by Gas Infrastructure Europe (GIE).
On November 26, stocks were still 58 TWh (+6% or +0.55 standard deviations) above the seasonal average of the previous decade, but the surplus has narrowed from 122 TWh (+13% or +1.38 standard deviations) at the start of winter.
The average fullness of storage facilities in the region was 87%, significantly lower than the 97% at the same time in 2023 and 94% in 2022.
After the unusually mild winters of 2023/24 and 2022/23, this year's winter in Northwest Europe has started colder, which has increased heating demand.
With the heating season now approaching the 20% mark, Frankfurt has experienced 377 heating degree days, close to the average of the past decade, but much more than in 2023 (303) and 2022 (345).
London has experienced 327 heating days so far, the coldest start to winter in five years, well above the 268 heating days in 2023 and 219 in 2022.
While cooling temperatures boosted heating demand, winds in the North Sea were below normal, reducing power generation at offshore wind farms and forcing greater reliance on gas-fired generators.
Adjusted for inflation, front-month prices in November were at the 87th percentile for all months since 2010, up from the 43rd percentile in February, suggesting a need to conserve inventories and attract more supply.
But the biggest price gains in futures were for crude delivered after winter ends this year, in the second and third quarters of 2025.
Because gas consumption has risen sharply this winter, traders expect Europe to need to buy more gas in the summer of 2025 to replenish its storage facilities than it did in the summers of 2024 and 2023.
The main challenge for Europe is what happens if the winter of 2024/25 remains below normal, followed by another cold winter in 2025/26. To minimize that risk, depleted stocks will have to be rebuilt in the summer of 2025, and traders are already betting that will be very expensive as Europe competes with Asia's fast-growing economies for more gas.
