欧洲天然气库存偏低加剧冬季LNG争夺和价格上行风险

Europe is nearing the end of summer with a low natural gas buffer, threatening to intensify a global fight for supply.

The region still needs over 100 terawatt-hours of gas worth more than €7 billion ($8.1 billion) at current prices to reach even its lowest storage target of 75%, according to Bloomberg calculations. Getting there would require an injection pace not seen this late in the season since the 2022 energy crisis, and risks pushing winter prices above €100 a megawatt-hour, according to Goldman Sachs Group Inc., Rystad Energy and Morningstar Inc.

“The potential for a global ‘fight for fuel’ is there, particularly in a colder winter,” said Go Katayama, principal insight analyst for LNG at intelligence firm Kpler.

European Union nations decided after the last gas crunch to build substantial buffers each year to guard against future shocks as they moved away from Russian pipeline supplies. But the Iran war has driven up near-term gas prices and made stockpiling uneconomical, leaving some countries, particularly Germany, struggling to reach even recently loosened storage targets. Governments and utilities have held off buying in the hope that LNG flows recover and prices fall in time to refill before winter.

That hasn’t happened. Persian Gulf supplies remain near a standstill, with the war showing no signs of ending and LNG carriers making far fewer trips through the Strait of Hormuz than oil tankers. Prices are more than twice as high as they were a year ago, and if disruptions persist through winter, Europe may have to pay even more to guarantee scarce cargoes arrive on its shores.

One risk is that Europe will once again price out poorer countries such as Pakistan and Bangladesh, causing a repeat of the blackouts and factory disruptions during the 2022 crisis. Back then, soaring European prices pulled LNG cargoes away from more price-sensitive markets, forcing some buyers to curb imports and ration energy.

Few expect Europe to experience physical shortages because it can pay up for gas, an increasingly important backstop as coal and nuclear capacity declines.

That doesn’t mean Europe would be immune to an economic hit from higher energy prices. Bond investors have already sounded the alarm, saying rising gas prices will reignite inflation, forcing central banks to increase interest rates more aggressively than markets expect.

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Daniel Karl, a lead economist at Oxford Economics, said that models point to inflation topping 6%, roughly double current levels, which would mean a “painful winter for both consumers and industry with uneven fiscal responses across EU member states due to varying fiscal capacities.”

Much hinges on the weather. El Niño could bring Europe a mild, stormy start to winter, though later cold snaps could quickly boost heating demand. Aggressive Chinese buying, outages in top pipeline supplier Norway or a late US hurricane could tighten the market further.

“We could easily see the European gas benchmark forced up just to rebalance global flows and aggressively price out any Asian demand,” said James O’Brien, head of LNG at D.Trading, a unit of Ukraine’s private energy company DTEK.

Competition for this winter has already intensified. India has rushed to replace lost Qatari supply, with imports surging in August to the highest in nearly six years. Taiwan and Thailand are also seeking supplies, and South Korea is securing winter shipments.

Even if Hormuz were to reopen soon, the LNG market would still remain tight, according to David Lewis, senior analyst for gas and LNG at Wood Mackenzie Ltd. Qatar — normally the world’s second-largest exporter — would need about 12 weeks to fully restart LNG production, excluding two trains damaged by Iranian attacks, Lewis said.

“Further price increases ahead of winter are quite likely,” said Udayan Bhattacharya, chief trader at Global Risk Management. “Under a ‘closed for longer’ scenario, Qatar is unlikely to provide much relief before winter and perhaps not even during the winter itself.”

Diverging Paths

Even within Europe preparedness varies for such challenges. Italy has filled storages to about 83% after the state offered incentives to encourage stockpiling, while Germany’s sites — the continent’s largest — are just over half full.

Low German inventories could force the country to boost winter imports, intensifying competition within Europe, while stocks are also unusually empty in the Netherlands and Belgium, key trading hubs that supply neighboring markets.

An additional challenge could emerge in January, when an EU ban on Russian LNG will remove supplies equal to about 5% of the bloc’s gas needs. Some traders see a possible delay, though Brussels has repeatedly ruled that out.

There are a few signs that higher prices are starting to help Europe attract supply. Chinese LNG imports fell sharply in August from a year ago, while some companies are looking to resell winter shipments or offer US cargoes to Europe, according to Citigroup Inc. analyst Maggie Xueting Lin.

But contracts may need to rise further if Europe decides it needs more.

“There should be urgency in the market to fill in Europe’s storages,” said Martijn Rats, global commodities strategist and head of European energy research at Morgan Stanley. “But that urgency is hard to find; the region is not attracting enough LNG, and with current prices it’s unlikely that it will.”