Gas withdrawals across the continent, which started at the beginning of the heating season in November, have intensified in the past ten days due to the recent cold snap that hit most of Europe. Typically, January is a peak withdrawal month, so high withdrawal rates come as no surprise.

Furthermore, the market ignored freezing temperatures with gas prices dropping on Monday below €30/MWh for the first time in two years amid strong confidence that the continent has enough gas storage to get through the winter.

Gas storage facilities across the continent are currently 79,14% full (75,30% in Romania) as reported by the latest data published for January 14 by the Gas Infrastructure Europe (GIE). The level is below the 81,72% reported a year ago and in stark contrast to 2022 when storage was drawn to just 47,66% of capacity. 

However, “storage remains above the 5-year average of 68% full for this time of year. For now, we are still assuming that European storage will finish this heating season at around 52% full,” said analysts at ING in a note published yesterday.

According to the European Commission, gas storage in Europe is “key for security of supply in Europe” as it can cover up to 30% of gas demand during winter, depending on the weather.

However, the latest forecast from Maxar Technologies quoted by Bloomberg suggests that “Northern Europe’s big freeze will give way to unseasonably warm weather next week”. According to Bloomberg, “the transition to warmer weather, which is forecast to last through the end of January, will further damp gas demand”.