Gas storage levels in Germany and the EU are lower than usual, while consumption is higher and the forward curve is flatter. This increases the risk of price spikes and possible limits on gas use during peak demand.
At the current depletion pace, EU gas reserves could fall below 20% by the end of winter. In Germany, this could happen by the last week of February, approaching the 2018 low of about 14%.
Storage Drawdown Risk Scenarios
Analysts at the Cologne Institute for Energy Economics (EWI) warn storage could drop below 10% if a cold spell lasts until the end of March. To avoid this, the EU would need to lift import capacity utilisation to 90% from about 55%, although withdrawals often slow in March as temperatures rise.
LNG import capacity is expected to rise by 2% this year, allowing imports to cover more demand and reducing reliance on stored gas. LNG can be sourced more flexibly on the global market than pipeline supply.
The IEA forecasts LNG supply growth of 7% this year, matching last year, which supports lower prices towards year-end. If storage falls too low, suppliers may need to buy higher-priced spot cargoes and apply consumption restrictions, mainly to industry to protect households.
The concerns we saw in early 2025 about critically low gas storage have not materialized this winter. EU-wide gas reserves are currently much healthier, standing at approximately 62% full according to Gas Infrastructure Europe’s latest data. This is significantly above the five-year average and far from the 20% level that was feared for this time last year.
Implications For Near Term Gas Markets
The increased reliance on LNG, which was identified as a key trend, has been the primary reason for this stability. A mild start to the winter and record-high US LNG exports in the fourth quarter of 2025 ensured the European market remained well-supplied, keeping Dutch TTF gas futures below €35 per megawatt-hour. This has dampened the seasonal price volatility we saw in previous years.
However, a potential disruption is emerging for the coming weeks as recent weather models now forecast a significant cold snap across northern Europe for the end of February. Even with high storage levels, a sudden and sustained increase in heating demand could rapidly draw down inventories. This introduces a short-term risk that the market has not yet fully priced in.
For derivative traders, this suggests that front-month volatility may be undervalued. The current stability could be broken by a weather-driven demand shock, creating opportunities in short-dated call options to profit from a potential price spike. The spread between the March and April contracts could also widen if the cold spell forces suppliers to pull heavily from storage.
While the forward curve for the remainder of the year remains relatively flat due to expectations of continued strong LNG supply, the immediate risk is to the upside. Unlike the situation in 2018, when low storage was the main concern, our vulnerability now is to a sudden scramble for spot LNG cargoes if a cold snap coincides with any minor supply disruption. This makes monitoring short-term weather and LNG tanker movements crucial.
