European gas reserves sink below normal – Bloomberg

Heat waves in the EU and Asia have driven consumption up and fueled competition for global shipments, the outlet has stated

Europe’s natural gas inventories are particularly low for this time of year, Bloomberg has reported, citing rising demand for air conditioning amid a regional heatwave.

Underground storage sites are currently around 62% full, the outlet stated, while typically reserves reach around 80% by early summer, helping ensure a robust buffer ahead of the winter heating season. 

Extreme heat in Asia has also caused fuel shipments to be diverted away from Europe, as buyers worldwide compete for limited supplies. As a result, European natural gas futures have hovered near a two-week high, meaning “the continent needs to pay up to keep supply coming,” the outlet wrote.

Despite the trend, the EU may still be able to top up its gas inventories to about 80% by the end of the summer, the outlet quoted a note by Goldman Sachs as saying.

The EU imports nearly 90% of its natural gas, with Russia still accounting for a significant share in the supply despite sanctions. 

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In May, European Commission President Ursula von der Leyen unveiled a plan to phase out all Russian oil and gas imports by the end of 2027, as part of the EU’s REPowerEU roadmap, which aims to eliminate the bloc’s dependence on fossil fuels from the country and shift to renewable sources.

The plan has drawn criticism from landlocked Hungary and Slovakia, which have relied heavily on Russia’s pipeline gas. Bratislava blocked the EU’s 18th sanctions package, targeting Russia’s energy and financial sectors, citing risks of shortages and rising prices. Budapest has joined the veto, and is pressuring the block to make concessions related to energy and broader RepowerEU rules.

Moscow has argued that the EU restrictions are self-defeating, causing surging energy prices and weakening the bloc’s economy. Since 2022, Germany, the bloc’s largest economy, has fallen into recession, while growth across the EU has stalled.