European gas: Storage gap supports high prices – Commerzbank

Norman Liebke at Commerzbank warns that low European gas storage, suspended LNG exports from Qatar and the end of the refilling phase are keeping European gas prices elevated. The TTF benchmark is already above EUR 65 per MWh, and the bank cautions that a widening storage gap and ongoing Middle East tensions could push prices sustainably higher.

TTF risk from low storage

"Against the backdrop of low European gas storage levels, the continued suspension of LNG exports from Qatar, and the approaching end of the refilling phase, European gas prices are also high."

"Should the gap from the usual storage level - currently 17 percentage points widen further, the TTF benchmark price could even sustainably exceed the 65 EUR per MWh mark."

"Across the EU, gas storage levels are just over 61%, marking the lowest seasonal level since the data series began in 2009. In Germany, storage levels are only at roughly 50%, which is 27 percentage points below the five-year average."

"At least for Europe, we calculated this Tuesday that European LNG imports would have to increase significantly from their current levels in order to achieve sufficient gas storage levels by the end of March next year."

"Additional upward pressure could arise if tensions in the Middle East persist and Europe has to continue its competetion with Asia for available LNG shipments."