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Gas flows and supply situationSpring Temperatures Reduce Gas Consumption At the beginning of the year, cold temperatures and the high demand from gas-fired power plants for electricity production led to significant storage withdrawals to ensure the supply of customers in Austria and neighboring countries, including Italy, Hungary, and Slovenia. Imports during the first two months of the year mainly came from Germany but, at times, covered only about one-third of daily demand. With rising spring temperatures, gas consumption is decreasing, leading to lower withdrawals from storage facilities. In fact, slight injections into storage were recorded during the first weekend of March. The storage level, including the 20 TWh strategic gas reserve, stood at approximately 44 TWh, equivalent to about 43%. However, this figure is around 29 TWh lower than the storage level on April 1, 2024. You can find the latest storage levels here. Shifts in Import Dynamics Germany remains the primary source of gas imports, although imports from Italy have recently increased significantly. At the same time, gas is being exported at other border crossings, particularly to Hungary, where export levels remain high. Gas exports to Slovakian storage facilities are also ongoing. Supply Security Ensured The most important news: Austria’s gas supply remains secure. However, due to the high withdrawals in recent weeks, the need for storage injections over the summer is now significantly higher than in 2024, which could present some challenges. Wholesale Price Decline Fortunately, wholesale gas prices have declined significantly toward €40/MWh in mid-March. At the TTF (Title Transfer Facility), prices have fallen even further to around €38/MWh. Analysts attribute this price drop to the liquidation of long positions by investment funds, which has led to a decline of approximately €20 in recent weeks. Towards the end of March, however, prices rose slightly again and are now at around EUR 44/MWh. Price Spread and Storage Targets The negative price spread, particularly for the 2026 yearly product, which is currently trading at around €37/MWh, remains significant. This provides little commercial incentive to invest in summer products for storage filling. Nevertheless, the European Commission continues to pursue high storage targets (90%) and has even proposed extending them for another two years to ensure supply security and market stability in Europe. However, experts argue that strict storage targets contribute to negative summer-winter spreads, thereby reducing commercial incentives for storage filling. A significant and rapid relaxation of the targets could normalize the market without jeopardizing security of supply. Stay Updated Follow us on LinkedIn, where we regularly share the latest updates on gas flows and supply security. |
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