EUROPE’S gas storage is filling faster than normal as exceptionally high prices discourage non-essential consumption and encourage maximum imports via pipeline and liquefied natural gas.

       Gas inventories in the European Union and United Kingdom had climbed to 380 terawatt-hours (TWh) by May 1, according to estimates compiled Gas Infrastructure Europe (GIE).

       Stocks had risen from 299TWh on April 1, generally considered the start of the summer refill season, and a post-winter low of just 291 TWh on March 19.Temperatures across Northwest Europe have been close to the average for the time of year ensuring heating demand has been fairly normal in recent weeks.

       But the exceptionally high price of gas has discouraged consumption by power generators and industrial users as well as maximising imports.

       The result is storage sites started to refill earlier than normal this year and inventory additions have been running faster than usual. Stocks began to increase on March 20, more than 10 days earlier than average, and since then have risen by 89TWh compared with just 11TWh in 2021 and a pre-pandemic five-year average of 64TWh.

       At the start of May, stocks were only 81TWh or 18% below the pre-pandemic five-year average –or just 0.21 standard deviations below the 10-year seasonal average.

       If inventory accumulation over the summer follows the same trajectory as the last 10 years, stocks are expected to reach 904 Wh by Oct 1.

       The probable range is from 750TWh to 1,058TWh, but that is more comfortable than the forecast range of 706TWh to 1,062TWh at the start of April.

       High prices and early and brisk refilling have reduced the probability inventories will start next winter at critically low levels.

       Assuming stocks reach 904 Wh by the start of October, they would be only 79TWh or 8% below the seasonal average for 2015-2019.But if prices remain elevated throughout May into June, which seems likely, inventory accumulation will continue faster than normal, and stocks are likely to start next winter higher than average.

       Sustained high prices will ensure Europe starts winter 2022/23 with more comfortable inventories than in 2021/22 – enough to cushion the region from all shocks except the halt of Russian gas supplies. — Reuters

       John Kemp is a Reuters market analyst. The views expressed here are the writer’s own.