Germany is set to miss its official target for filling natural gas storage sites, leaving it with a reduced buffer against surging winter demand. German gas reserves were only 61.17% full as of Friday, according to data from Gas Infrastructure Europe. That falls well short of a Nov. 1 goal of about 70%, despite authorities' efforts to ramp up fuel purchases through state-owned energy company SEFE over the past month. Germany's economy ministry said Friday it won't reach its target.
The shortfall comes as colder weather is forecast to sweep across Germany and much of Europe in the coming days, potentially boosting demand for gas for heating. Average temperatures in Berlin, Frankfurt and Munich are expected to slide 2C to 4C below normal, according to Vaisala meteorologist Matthew Dross. In southern and eastern Germany, temperatures could dip below freezing, government forecaster DWD said. A high-pressure weather pattern may also bring calm, cloudy days with little wind, conditions known as Dunkelflaute that can curb wind and solar generation.
European gas prices have already tripled this year as the Iran war disrupts global energy trade, and uncertainty over how long the conflict will last has hampered stockpiling. Germany, Europe's largest economy and home to an energy-intensive manufacturing sector, is particularly ill-prepared for prolonged winter demand spikes, with gas buffers trailing the European Union average of 75%. European natural gas futures surged past €100 a megawatt-hour last week for the first time since 2022.
The situation echoes the energy crisis of four years ago, when the war in Ukraine cut off pipeline gas from Russia and hit Germany hard. Italy has criticized Berlin for not doing enough to replenish inventories this year. A spokesperson for the German Economy Ministry said current reserves should enable the country to get through the winter, and that supply sources are now more diversified, coming via pipelines from Norway, LNG terminals and European neighbors.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing