Germany Asks for Gas Storage Exemptions, Sending Prices Tumbling #NewsGerman

(Bloomberg) — European gas futures tumbled the most since early 2024 after Germany called for exemptions from the European Union’s storage filling targets this year, amid fears that the requirement is driving market speculation and pushing up prices.

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In a meeting of the Gas Coordination Group in Brussels on Thursday, countries took turns to express their concerns about how the bloc’s storage targets are contributing to rising gas prices. Berlin said that traders expect member states to have to intervene to make sure those goals are met and called for greater flexibility to help damp this expectation, according to people familiar with the matter who were not authorized to speak publicly.

After the meeting, Germany’s economy ministry confirmed the nation’s position saying that the European Commission has promised to remedy the situation.

Europe’s gas-refilling rules have become a growing focus for the market, as fast-depleting inventories mean that greater volumes would be needed to meet targets designed to ensure that inventories are 90% full by Nov. 1. Prices also fell sharply on Wednesday after Bloomberg reported that some nations were pushing for flexibility on the storage requirements.

Benchmark gas prices in Europe slumped as much as 9.3% on Thursday, the biggest decline since January 2024. A seasonal price spread – an important marker for economics of gas stockpiling that has soared in recent weeks – narrowed to a third of its recent peak.

A combination of colder weather, low wind generation and the loss of Russian supplies through Ukraine has meant that the region has been drawing down inventories of gas more quickly this year. Storage sites are now 47% full on average, the lowest seasonal level since 2022.

Gas declined earlier Thursday also as US-Russia talks boosted prospects for an end to the war in Ukraine, raising expectations that supplies from Moscow could resume.

The prospect of increased demand this summer for refilling pushed prices to a two-year high earlier this week. Summer prices are also stubbornly high, even after the recent retreat, making it unprofitable to store the fuel. Germany’s market manager Trading Hub Europe GmbH is considering subsidies for refilling stocks.

There are two discussions taking place – one about easing targets this year as well as a push to bake in this flexibility for future years.

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