On Friday, the European Commission adopted intermediate targets for EU member states with underground gas storage facilities on their territory as well as “for EU countries that are connected through the gas network.”

The European gas market reacted bullishly to the news, with the TTF front month closing 2,4% higher on Friday. Meanwhile, “the European carbon market initially edged down before recovering along with gas late in the session” as stated by Energi Danmark.

According to the new regulation, the European states must ensure at least 50% full gas inventories on 1 February 2025, higher than the 45% target set for 1 February 2024. Intermediate targets were also set for May, July and September. 

“The intermediary targets of 1 February and 1 May 2025 are important targets for the security of supply in 2025, also in view of the end of gas transit agreement through Ukraine by 1 January 2025” said the document, adding that the intermediary targets “will be particularly important in case the 2024-2025 winter is colder than average.”

According to data from the European Centre for Medium-Range Weather Forecasts, compiled by Bloomberg, temperatures during this heating season “are set to remain mostly below levels seen in the last two years.” 

In fact, Northwest Europe has already experienced a cold start to the winter compared to the previous two seasons, boosting heating demand. As a result, withdrawals from gas storage are at their fastest pace since 2016. As of Saturday, inventories are just 85% full, compared to 95% during the same day last year and 93% in 2022.