The gas marketplace has calmed down for now. May the winter be warm..

The filling period for gas retention in Europe is slowing down. In early June, the magazines were half full (for pessimists half empty).

A fewer months ago, the marketplace situation did not importantly favour purchases during the summertime period to sale more expensively the next winter. And the deficiency of an economical stimulus called into question the accumulation of adequate stocks to meet EU regulations, or 90% of the filling of warehouses by 1 November. In fresh weeks, however, the situation has improved somewhat and empty retention facilities have moved.

Spreads weak but not tragic

The beginning of the year passed under the sign of negative spread summertime 2025/winter 2026. Recently, however, the spread is already positive, although far from the dreams of the traders. It barely exceeds EUR 1 per MWh, which can cover the costs of storing gas in warehouses until winter, but the earnings will be penny. The times erstwhile the spread was respective euros so far have passed. Hence the signals from the market, first of all the German government, which appeared any time ago, to pay for storage. However, the German government does not intend to spend taxpayers' money, but the European Parliament and the Commission itself signalled flexibility in the approach to gathering the rules on the degree of filling.

Today, gas flows to warehouses, and the German marketplace operator THE declares that it will press for subsidies only if the situation truly requires it. So far, according to THE, what is happening does not require state intervention, and may no longer require. We'll see in the summer. Prices are fine for now, spreads are fine besides - said the head of THE Sebastian Kemper, reserving that possibly the government will inactive gotta intervene if booking volumes in warehouses goes poorly. The German government besides sees no reason for intervention at the end for which consumers would pay anyway. Today, intervention is not justified - the Ministry of Economy in Berlin assessed.

According to unofficial information, the German government went even further, and considered that intervention would not be necessary, even if Germany did not accomplish the national goal of filling the warehouses in 70% in early November. There will be no request for intervention if the level of contract of imported LNG is appropriate - the Ministry of Economy assessed in the memo referred to by Bloomberg.

Javier Blas, a well-known Bloomberg publicist, warns, however, that Europe can inactive enter the winter period with the second lowest level of magazine filling. The worst happened during the crisis 2021 – 2022. However, it is possible to scope 80% unless the weather again interferes, this time not so much in Europe, but in the Caribbean Sea, where the hurricane period is about to begin. The possible harm to the liquefaction strategy by the 2004 Hurricane-sized ‘Katrina’ could one more time stone the market.

In addition to the weather, Blas sees 2 political risks – possible sanctions on Russian gas and the US-Chinese agreement, which would end the ongoing trade war and start Chinese exports again, expanding request for LNG.

In the EU, the desire to include Russian gas with sanctions is problematic. Although the EC has published a plan of departure from imports since 2027, according to the Politico portal, the Belgians have asked for a more comprehensive impact assessment, and the French like to wait until they materialize in the many-year contracts negotiated with Qatar. Slovakia and Hungary besides argue the departure from Russian gas.

In Poland, resisting injection

After winter, Polish magazines left the remainder of Europe on a plus. The winter period ended with almost 44% filling, which is about the same level as last year. We did not usage much, although the share of gas in electricity is increasing, but in the case of the lower generation of RES the shortages so far cover coal plants.

Since the contractual start of the summertime season, we've been inflated, but we've been pulling out a lot. As a result, stocks are not changing much, present we have about 44%. Last year was better, almost 50%. But on the another hand, we had the song Maanamu ‘exceptionally cold May’, so a small more gas went on heating.

In addition, GUS data indicate an increase in industrial production, which may besides be associated with increased gas consumption. For now, there's nothing to panic about, just wait for it to get warm. Because, below that, the temperature matters, and big. Poland should store about 1.5 billion metres of cubic metres to meet EU requirements by autumn.

Stocks thinned cold

There are 2 things to explain. First of all, why did the last winter, even though we did not feel it especially, European gas retention facilities have been so ravaged? By comparison, on 1 April 2023 they were 55% in the EU, 1 April 2024 - 59% in the EU, and on 1 April this year only 34%. After all, the 2 erstwhile winters were besides "war", and alternatively warm in addition. Although Russian gas has ceased to transit through Ukraine, the marketplace has known this much earlier and has disputed this fact.

Cezary Dulkowski of the Office for Trade in Gas Orlen explains that erstwhile we analyse the prices of place on the marketplace and the pace of emptying warehouses we find primarily a correlation with weather. December passed under the mark of dunkelflaute, which is the low production of electricity by windmills. This means that these deficiencies had to be complemented by gas plants. The second period of increased prices and faster emptying of warehouses is the end of January and the 3rd period is the end of February.

It was then that 2 cold waves stretched over Europe. It may not have been a large frost, but it has importantly increased gas consumption. In erstwhile years, there were no specified waves. Moreover, neither the coming to power of Donald Trump, nor the rumors of Russian gas returning to Europe, nor the American-Ukrainian brawl in the White home touched prices. “So it was the weather, not the geopolitics that emptied the warehouses,” emphasises Dulkowski.

The gas will not run out

The second mystery is price behaviour in relation to the next summertime - another winter. For months the stubborn marketplace prices for the winter of 2025/2026 have not wanted to go up, and for many weeks at the beginning of the year were even lower than those in the summer. It's only late that they've overestimated summertime contracts. However, EU countries had to buy only 65 billion cubic metres of gas to comply with the regulations, 30 billion cubic metres more than in the erstwhile 2 years. Higher request is higher prices and they do not want to grow.

The U.S. customs war against China, resulting in Chinese stopping purchases of American LNG, does not make much contribution. Already last year, China brought only 30 methanes, only 6% of Chinese imports. On the scale of American exports, it's practically unnoticeable. But there's another thing. In 2024, the Americans did not quit a single condensing installation, and as early as this year, fresh lines with condensation capacity of nearly 4 billion m six per year will be launched. Next year it will be almost 3 billion m six. fresh powers, and in 2 years - almost 5 billion m six.

In addition, the Trump administration revoked the temporary ban on issuing fresh permits, introduced for Biden. Given the investment plans of exporters, this means that US export capacity by 2030 is likely to double and scope nearly 400 billion m six. gas a year. So the gas will not run out, and if so, it will be comparatively inexpensive. The marketplace sees this and possibly this possible is the answer to the mystery of prices. Finally, by 2025 the U.S. export capacity will increase by about 15%, or 330 Q-flex methane.

Prices can inactive move.

Of course, a large part of these additional powers is already contracted in the long term, without specified a financial basis fresh lines would simply not arise. But as usual, any of the liquefied gas will be offered at the spot. If the EU needs more gas just this year, European companies will gotta buy gas for the spot. This creates an additional vulnerability to the hazard of price changes at the spot. You can't see it on the marketplace yet, but possibly we'll see it again.

The EU's organisation of ACER regulators to avoid this hazard recommends faster decarbonisation and securing larger LNG volumes under flexible contract conditions alternatively of the place market. This, according to ACER, should reduce the hazard

As far as Poland is concerned, the hazard of vulnerability to the jump on the place is almost not affected. Orlen is well contracted in the long term, place buying is practically a margin erstwhile an chance comes along. In addition to the Świnoujście terminal, the U.S. LNG, contracted at Venture Global, yet began to reach. The hold was almost 5 quarters, and Americans are accused by a number of customers of deliberately delaying the beginning of the terminal and selling the contracted gas "on the side" just at the spot. Orlenu CEO Ireneusz Fąfara has just announced that the company will not quit and request VG to settle the backlog, but the possible arbitration verdict will gotta wait many months.