Oxford – European Gas Market Outlook Supply and Demand Winter Outlook

The European gas market is expected to have comfortable supply and demand during the winter months, thanks to record storage levels. European hub prices have stabilized but are still higher than pre-crisis levels. There is no risk of physical shortage this winter due to the significant storage stocks. However, cold snaps may cause prices to rise temporarily. Gas demand is expected to remain subdued, primarily due to low usage in the power sector and increased renewable energy generation. However, there are some concerns regarding the limited flexibility in European gas production and pipeline imports. Any increase in demand or reduction in LNG supplies could lead to higher prices and a narrower price spread between winter and summer. Additionally, the potential end of Russian transit gas through Ukraine in 2024 makes storage fills strategically important. On a positive note, Europe's capacity to import LNG has increased with the addition of new regasification terminals, and steady LNG imports are expected at similar levels to the previous winter.