German exports rose again last week, mostly to meet higher demand in Italy and with the majority of the volumes sourced from an increase in storage withdrawals.
German storage withdrawals accounted for 16% of total daily European gas demand at their peak last week, the highest value since at least 2019 (as far back as my data go).
The reduction in transit fees from 1st January is also likely to have played a key role in facilitating the increased role of German storage withdrawals in meeting demand in neighbouring countries.
Once again, these signals point to the growing role Germany is playing in ensuring security of gas supply to Italy and Central Europe, as well as the entry point for the LNG volumes that are set to replace the lost supply from Russia.
With Germany, Italy, Austria and Slovakia among the few European countries left with volumes of gas in storage above 60% of capacity, though, the market remains well set to see out the rest of the winter without significant issues. While increased storage withdrawals signal changes to established flow dynamics and potentially in the value of individual infrastructure assets, security of supply risks remain limited.
Source: Giovanni Bettinelli
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