Fear of global gas crisis eased by warm start to winter

Bloomberg

A warmer-than-expected start to winter across large parts of the world is rapidly easing fears of a natural gas crisis that had been predicted to trigger outages and add to pressure on power bills.
Forecasts point to temperatures above seasonal norms for most of Europe in the next two weeks, while the US expects better weather through mid-January. It’ll be more comfortable too across much of China — the world’s biggest gas importer — over the next 10 days, and Tokyo may see a spike around mid-January.
Gas futures are plummeting on reduced fuel consumption and the weaker outlook, with US contracts tumbling in their first trading session of 2023. European gas briefly touched lowest level since the war in Ukraine started.
“The risk of extreme market tightness that people were worried about before the winter started seems low now,” said
Abhishek Rohatgi, a Singapore-based analyst at researcher BloombergNEF. Europe has rebuilt inventories, while milder weather across North Asia means there’ll be less competition for liquefied natural gas
cargoes, he said.
Governments and utilities had been bracing for gas shortages after Russia invaded Ukraine last year, disrupting energy deliveries and lifting global demand for LNG. Prices for gas and coal hit a record as importers rushed to stockpile fuel for winter, when consumption peaks.
Gas storage across Europe is 84% full, far above the five-year seasonal norm of 70%, according to Gas Infrastructure Europe.
Strong winds are also reducing stress on the region’s energy
systems. Germany is expected
to produce near-record wind power on Wednesday.