Remember a few years back when we were all worried about levels of European gas storage? Morgan Stanley energy analysts had a note out late Thursday that seemed worth flagging to a broader markets audience – people who read our live blog.
MS say that the situation this winter looks “relatively fragile”, with European inventory levels at 83% full, a 10-year low entering winter (excluding 2021), and 15 percentage points lower than the average inventory fill over 2022-2024.
That’s not a huge reason to panic, as they say “this inventory risk is diminished by the large volume of LNG supply already hitting the market”.
But it does mean there is a risk of short-term price spikes as “LNG supplies still take 2-3 weeks to arrive compared with the previous flexibility from Russian gas supply, where supplies could be nominated on a day-ahead basis.”
So one to watch.
Longer term, MS see gas prices falling. They forecast the TTF benchmark to fall below €30/MWh by the second half of 2026.
Those levels haven’t been seen since May 2024. The benchmark was last at 31.35 euros per megawatt hour.
Source: Reuters
