Starved of the Russian imports on which it’s long relied, Europe has rushed to import liquefied natural gas from around the world to fill up storage. Now, a combination of unusually warm weather and successful bidding for cargoes means facilities are almost full before Europeans have even turned the thermostats up.But risks still lie ahead: Much depends on the weather, and a cold snap would quickly see Europe dipping into its stockpiles.
Gas is near the lowest since June, though the dangers are still in the market pricing. February futures are trading at a 44% per cent premium to November, and costs for next winter are also higher, showing that supply issues are expected to persist.According to Timera Energy, gas demand reduction across 2022 is estimated at about 7-9 per cent, “mostly driven by shut in of large industrial consumers”.
For now, ships keep arriving. North-west Europe is on track to receive 82 tankers of LNG this month, 19 per cent more than in September. More vessels are staying longer in so-called floating storage in anticipation of higher prices and amid limited capacity to receive the fuel, according to shipbrokers Fearnleys A/S.This situation that may last until mid-January, according to Mr Oystein Kalleklev, chief executive of LNG shipowner Flex LNG in Oslo.
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