The debate about a possible relaxation of the EU requirements for the mandatory filling of gas storage facilities is causing movement on the market. While traders are already experiencing noticeable downward pressure on prices, the European Union is faced with the decision to extend its storage targets beyond the end of the year or to make them more flexible.
Recent discussions about a possible easing of EU requirements for mandatory storage of gas have increased the downward pressure on prices, traders report. This development has particularly affected the summer contract, which has been trading at a premium to the following winter - a reversal of the usual price spread between the two products.
In addition, weather forecasts last Friday confirmed that milder temperatures are to be expected in the coming days. This will further ease the situation on the gas market and reduce the short-term need for additional storage.
"More flexibility can ensure that the pressure to fill all gas storage facilities equally decreases and that market conditions normalise," explained the Federal Ministry for Economic Affairs and Climate Protection (BMWK) on Friday. The European Union is considering extending the current storage targets by at least one year beyond the originally planned end date of 31 December. This could also lead to more flexible targets from 2026. While the EU can no longer change the targets for this year, there is the possibility of granting exemptions if a member state can guarantee its security of supply in another way.
The EU Commission confirmed in an interview with a European news channel that various options are currently being examined to ensure that there is sufficient gas in storage even after the current regulation expires. The filling level requirements of the EU and Germany have recently been criticised as they were partly responsible for an unusually high negative summer-winter spread.
Effects on the markets
Traders have been buying more summer gas and relying on state-supported filling of gas storage facilities. On the German market area THE, the summer contract was last quoted at EUR 49.03/MWh, while the winter price rose to EUR 48.90/MWh. Media reports about a possible adjustment of storage targets have already had an impact on pricing, with the spread having widened to EUR 5.77 in the meantime.
The coming weeks will show to what extent the EU will actually adjust its storage targets and what impact this could have on gas prices.
