European gas demand surges as storage withdrawals accelerate

Last week estimated European gas demand rose more than 20% above seasonal expectations and recorded a 25% week-on-week rise.

This was enough to erase in a single week the effect of unseasonably low demand in the previous 31 days, which had supported storage injections across September and October.

Higher demand led to a rapid acceleration in storage withdrawals, which reached by far the highest level for the first week in recent records.

While LNG sendout also recorded its highest levels since March last week, it remains below last year’s levels and played limited role in meeting the sudden rise in demand.

Such an early surge in storage withdrawals does not materially alter the outlook for the winter but it will begin putting pressure on LNG imports (and therefore prices), and begins to increase the risk of further volatility later in the season.

Source: Giovanni Bettinelli (Linkedin)