Sharp rise in European gas prices unlikely despite cold weather, says association

Persistently freezing weather is driving up gas consumption in Europe. However, a sharp increase in the price of the commodity is unlikely, according to Gas Infrastructure Europe (GIE), the European association of gas infrastructure operators. The DPA news agency reported this.

According to the Brussels-based association, gas withdrawals from storage are currently above the 10-year average. However, storage levels remain relatively high. Prices would begin to fluctuate more if storage facilities were close to being emptied and became more dependent on imports, it said.

„It is now easier to combine imports with withdrawals from storage, which benefits consumers,“ GIE said.

According to the association, the above-average withdrawals from gas storage are due to the current low temperatures across Europe and the end of Russian gas transit through Ukraine at the beginning of the year.

Even if the cold spell were to last longer, gas supplies to Europe are secure, according to GIE. The most that could happen is that storage facilities will be emptier in spring than expected.

According to GIE estimates, storage levels could reach 30 percent in March, which „would require increased attention to refilling storage facilities next summer“.

While in the past it was usually possible to buy gas at lower prices in summer than in winter, recently the opposite trend has been evident, with gas prices in some cases higher for the summer months than for the winter months. The association points out that it will be important to fill storage facilities sufficiently in summer ahead of the following winter.

Ukraine, which has faced large-scale Russian military aggression since 2022, halted Russian gas transit at the beginning of the year after the relevant contract expired.

Slovakia, which is heavily dependent on Russian gas supplies, sharply criticized the end of transit. GIE said that, given the existing infrastructure and storage levels, the country should have no problems securing its gas supplies.