EU gas storage at 13-year low raises winter price volatility fears

Europe is heading into the cooler months with gas storage levels at their lowest point in 13 years, according to market figures cited by analysts. The European Union's gas stocks were 63% full in the last week of August, well below the 80% average for late August in recent years. The shortfall has prompted concern among traders and energy experts about tighter supply conditions and sharper price swings if winter demand rises.

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The current storage position is being described as among the weakest for this time of year since 2013. At the present pace of injections into storage, the bloc is expected to enter the winter heating season with gas stocks about a fifth below the five-year average. Greg Molnar, a gas analyst and professor, said low storage levels were increasing the risk of heightened winter price volatility, especially if cold spells or slow wind patterns lift gas use.

The United Kingdom is being singled out as particularly exposed to any market disruption. It is one of Europe's biggest gas consumers but has some of the lowest domestic storage capacity, leaving it more dependent on imports through pipelines from Europe and tankers from the United States and the Middle East. Chris O'Shea, chief executive of Centrica, said this week that the UK had almost no gas in storage for the coming winter.

The warning matters because gas storage is a key buffer in Europe's energy system. Operators usually fill storage sites during the summer, when demand and prices are lower, so that supplies are available when heating demand rises. This year's weaker build-up has left the market more vulnerable to weather-driven spikes and to any further disruption in global supply routes.

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The storage squeeze has been linked in the report to several pressures that have slowed replenishment. These include a cold end to last winter, higher-than-usual gas-fired power generation during Europe's summer heatwaves, and disruption to oil and gas exports from the Gulf region after the US-Israel war on Iran. Market prices have remained relatively calm through much of the summer, but analysts said that confidence has weakened as winter approaches.

What remains unclear is how quickly storage can be rebuilt before the heating season begins and whether weather conditions will worsen the situation. Analysts are also watching for any further disruption to supply routes and for signs of sustained demand from power generation. The next focus will be on injection rates, temperature forecasts and whether the market can avoid a sharper winter panic.

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