The EU has exited the heating season with a record volume of gas in storage, following another mild winter and as a result of reduced industrial demand and a concerted effort by policymakers to boost stockpiles.

Data published by Gas Infrastructure Europe (GIE) shows that there were 64.3bn cubic metres of gas in storage at the start of this month. This is 4 bcm, or 6.6%, more than the level at the end of the previous heating season, which itself set a record. Storage facilities are currently filled to 59.9% of capacity, according to GIE (chart).

The heating season in Europe typically ends at the end of March. This year, net gas injections have been taking place since April 1. By April 5, already 763mn cubic metres of gas had been put back into storage.

Europe also entered the latest heating season with a record stockpile of gas, with storage facilities filled to practically full capacity. The European Commission had mandated that member states should fill their facilities to 90% of capacity by the start of November, but this level was surpassed as a result of market forces.

Europe has been supported by ample LNG supply over the last half a year, while industrial demand has remained stagnant as a result of demand destruction caused during the height of the energy crisis. According to Columbia University, the EU’s gas-demand-weighted industrial production index dropped by around 11 percentage points between January and December 2022 because of high prices and supply shortages, and remained depressed throughout 2023. It ended that year approximately 13 percentage points below the level in January 2022.

Russia began curtailing pipeline gas supply to Europe in late 2021, and it deepened its cuts following the invasion in Ukraine, to put pressure on European governments to withdraw support for Kyiv. However, while high gas prices caused great pain for European consumers, they also led to the market attracting significant global LNG supply that traditionally went to Asia.

Natural gas prices in Europe have fallen substantially from levels seen at the height of the energy crisis in the late summer of 2022. But they remain elevated compared to historical trends, with front-month contracts still trading at around 50% the 10-year pre-war average. Still, the recent drop should make it cheaper for companies to inject gas into storage this summer.

This puts Europe in good stead to enter the next heating season with high gas levels as well. Meanwhile, the global LNG market is set to loosen substantially from the middle of the decade, as a result of new supply coming on stream – primarily in Qatar and the US. 

European gas prices shot up so high in the energy crisis that the Asian market lost its traditional premium price. But now that prices have subsided again, that premium has returned, which could put a dampener on LNG imports into Europe.

On the other hand, Russian pipeline gas flow has recovered. Data published by Russia’s Gazprom and the European Network of Gas Transmission System Operators (ENTSOE) shows that Russian gas pipeline exports to the EU were up 32% year on year in the first quarter of 2024, totalling 7.7 bcm.