European gas inventories have reached record levels, amid a week demand which has caused excess gas moving into storage, putting pressure on producers to cut supply.
The unusually high European stocks have resulted from a combination of factors. These are the sluggish LNG demand in Asia which has triggered a rise in LNG supply globally, two warm winters, as well as the reduced industrial demand due to the pandemic, Reuters reported.
Therefore, a strong supply cut is necessary or storage in northwest Europe will be full by the end of July or early of August, noted Marina Tsygankova, a gas analyst at Refinitiv.
Some countries, such as Belgium, already have stocks running at over 90%, while others including Germany, Austria, France and Slovakia, have storage levels above 70%.
Norwegian flows to Britain averaged at 319 GWh per day in May, compared to 540 GWh per day in May 2019, according to Refintiv Eikon data.
Exports to continental Europe were at around at 2,387 GWh per day last month, compared to 2,623 GWh per day in May 2019.
Meanwhile, Russian supplies via three main lines averaged at 3,374 GWh per day in May 2020, a 21% drop compared to May 2019.
LNG deliveries are expected to be lower in June as well as dozens of cargoes for loading in the US have been cancelled for June and July.
