Taps Coogan – April 4th, 2023
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With the heating season in Europe all but over, natural gas storage sites are sitting with dramatically higher inventories than this time last year, as the following chart from Berthub highlights.
Despite a lot of apocalyptic calls last fall about the EU running out of gas, we noted all the way back in September that unless the continent got hit with a particularly cold winter, it could probably pull through with some demand curtailment and maybe a recession.
Well, the continent got a very warm winter and is now ‘well positioned’ to rebuild inventories for next winter. To boot, EU gas prices have fallen below the level seen on the eve of Russia’s invasion of Ukraine (still a very elevated price).
Nonetheless, it is assumed that there will be more competition for LNG supplies from a recovering China this year, so the EU’s ongoing transition away from Russian gas is not completely out of the woods.
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Another reminder that the prediction business is difficult….who would have thought this would occur way back in November, with the Ukraine War burning?