Due to lower temperatures, gas has become somewhat more expensive last week. Although the increase remains limited due to the high European fill rate. This turned out to be an important reason for the European Union to once again impose an ambitious filling target on its member states. In addition, LNG imports remain at a high level despite strikes at French LNG terminals.
The gas price roughly varies between €41 and €43 per megawatt hour, with a slight upward trend. The weather once again appears to be a very dominant factor on the gas market. This week's slight upward price pressure can mainly be attributed to an approaching cold period. Contrary to recent weather forecasts, temperatures are currently colder than average. This situation is expected to continue for a while.
Despite the lower temperatures, the price increase remains limited. Now that the heating season is almost over, the fear of gas shortages has disappeared like snow in the sun. The filling levels are much higher than average. This appears to be reason enough for the EU to fill its gas reserves even further this year. The European Commission's plan to fill gas reserves by 1% by November 90 has been approved by the Member States. This means the target is more than 10 percentage points higher than last year. Although the question remains how ambitious the target really is. Last year, Member States managed to fill gas reserves by almost 95%.
LNG imports are favorable
Despite the greater demand from China, the European Union is still able to import large quantities of LNG. Even strikes at several French LNG hubs and new problems at the major American LNG importer Freeport LNG did not result in lower imports. The Netherlands, Belgium and Germany managed to meet 30% of their gas demand in LNG at the end of March. Moreover, the import capacity is still being strongly expanded. For example, three German gas terminals are currently in the start-up phase.
In addition, the Netherlands announced that it would expand LNG import capacity by another quarter by 2026. This should enable the Netherlands to shake off its last dependence on Russian gas. Although the question remains whether the LNG supply remains large enough to actually utilize that capacity. Due to the strict corona lockdowns, demand for LNG in China lagged behind last year. As a result, Europe was able to take over China's excess LNG. The reopening of Chinese society makes it unlikely that the EU will again be able to acquire large quantities of LNG from the Asian country. The growth of international liquefied gas production therefore remains crucial for European ambitions in the field of LNG imports.