Storage sites are currently 70% full, -25% compared to the same time last year, report says.

Europe’s gas reserves are being depleted at their fastest pace in seven years as a result of surging heating demand driven by cold weather as temperatures are forecast to drop even further this week, increasing the strain on supplies, according to Gas Infrastructure Europe data analyzed by Bloomberg.

Underground storage facilities, crucial for stabilizing supply during periods of high demand, are now just over 70% full — a significant decline from 86% a year ago. While immediate shortages are not anticipated, the rapid drawdown could complicate efforts to replenish reserves ahead of the next heating season and contribute to short-term price volatility.

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Since their seasonal peak, storage levels have fallen by 25 percentage points, the sharpest drop since 2018, the report says.

Northwest Europe is already experiencing colder weather, which is likely to drive further withdrawals as heating demand rises.

Additionally, Europe’s reliance on global liquefied natural gas (LNG) to compensate for reduced Russian pipeline flows increases exposure to market volatility.

Unplanned disruptions at major suppliers add to the fragility. Norway’s Hammerfest LNG plant, for instance, has halted operations until January 9 due to a compressor failure.

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Natural gas prices rose 4% last week, nearing a 14-month high, as tighter supplies and shrinking stockpiles put pressure on the market.

Typically, storage provides 25-30% of gas consumed in the European Union during winter; it reduces the need to import additional gas and contributes to absorbing supply shocks, according to the Commission for Energy, Climate Change, and Environment.

The E.U. experienced a prolonged period of volatile and high energy prices in 2021 due to lower-than-usual storage filling levels, among many factors. The increased geopolitical tensions after Russia’s invasion of Ukraine in the beginning of 2022 amplified uncertainties and highlighted the need for well-filled gas storage for future winters.

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In March 2022, the Commission published a Communication on security of supply and affordable energy prices (COM/2022/138), together with a proposal for a new regulation on gas storage. The proposed measures aimed to address the root causes of the problem in the gas market and ensure the security of supply at reasonable prices for winter 2022-2023 and beyond.

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