German gas storages switched into withdrawal mode on the 6th of November and remained in this mode for the rest of the month. The aggregated filling level of the storages decreased by 9 percentage points, from 92% to 83% (194 TWh) and was in line with the level observed at the end of November 2016 (see figure below). Especially the second half of November was marked by positive spreads between the Day-Ahead and Month-Ahead or Quarter-Ahead products, which incentivized storage withdrawals.
In November there was a new ruling by the Dutch high court concerning the future of gas production from the Groningen field, which is the major provider of L-Gas in northwest Europe. According to the decision the planned production of 21.6 bcm of gas from the field in the current gas year will not be changed. However, the court ordered the ministry of economy to come up with a more substantiated explanation for the production cuts from the Groningen field. The court ruling was not accompanied by noticeable price movements at the traded markets and was probably expected by market participants. However, the future of L-Gas production from the Groningen field remains an issue on the political scene in the Netherlands. The new coalition government is proposing to cut Groningen production at 20 bcm by 2021 because of public unrest resulting from earthquakes in the region.
Source: Team Consult
