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Energy Storage · Europe Gas · LNG · Price Spreads
Europe's crucial gas market price spread between summer and winter contracts has collapsed to €0.2 per megawatt-hour, a level last seen in June, directly jeopardizing the continent's ability to economically refill its fuel inventories this summer.
This narrow price difference, down sharply from a week ago, removes the economic incentive for gas stockpiling during warmer months, which typically relies on cheaper summer gas for winter reserves. Europe faces a second consecutive challenging stockpiling season, following last summer's difficulties that left storage sites emptier than usual.
Recent cold spells caused rapid withdrawals, with freezing temperatures expected to return. Benchmark Dutch front-month gas reached above €30 per megawatt-hour on Monday, its highest since November, after gaining nearly 8% over two sessions, driven by colder weather forecasts and escalating tensions in Iran.
May contracts rose to €27.20 per megawatt-hour, while November contracts saw a smaller gain to €27.40 per megawatt-hour. James Waddell, head of European gas and global LNG at Energy Aspects Ltd., stated Europe will have "very low stocks by end-winter" and must "boost injections next summer." BloombergNEF noted the small price premium "will disincentivize Europe’s gas storage replenishment." While liquefied natural gas flows are expected to increase in 2026 as several US projects go online, fuel inventories remain a critical buffer against supply disruptions.
