Gas storage in Germany and across the EU is lower than normal. At the same time, demand is higher and the forward curve is flatter. This raises the risk of sudden price spikes and possible limits on gas use during peak demand. At the current rate of withdrawals, EU gas reserves could drop below 20% by the end of winter. In Germany, reserves could fall below 20% by the last week of February, nearing the 2018 low of about 14%.

Storage Drawdown Risk Scenarios

Analysts at the Cologne Institute for Energy Economics (EWI) warn that storage could fall below 10% if a cold spell lasts through the end of March. To prevent this, the EU would need to raise import capacity utilisation to 90%, up from about 55%. In practice, withdrawals often slow in March as temperatures rise. LNG import capacity is expected to increase by 2% this year. This should allow imports to cover more demand and reduce reliance on stored gas. LNG is also easier to source on the global market than pipeline gas. The IEA expects LNG supply to grow by 7% this year, the same as last year. This should support lower prices later in the year. If storage drops too far, suppliers may need to buy higher-priced spot cargoes and impose consumption limits, mainly on industry, to protect household supply. The worries seen in early 2025 about critically low gas storage have not happened this winter. EU-wide reserves are currently much stronger, at about 62% full, based on Gas Infrastructure Europe’s latest data. This is well above the five-year average and far from the 20% level that was feared at this point last year.

Implications For Near Term Gas Markets

Greater use of LNG has been the main reason for this stability. A mild start to winter and record US LNG exports in Q4 2025 kept Europe well supplied. This helped keep Dutch TTF gas futures below €35 per megawatt-hour and reduced the seasonal price swings seen in prior years. Still, a new risk is building for the coming weeks. Recent weather models now predict a sharp cold snap across northern Europe in late February. Even with high storage, a sudden and sustained jump in heating demand could quickly draw down inventories. This creates a short-term risk the market may not be fully pricing in. For derivatives traders, this suggests front-month volatility may be underestimated. Stable conditions could break if weather drives a demand shock. This may create opportunities in short-dated call options if prices spike. The spread between the March and April contracts could also widen if suppliers are forced to draw heavily from storage. While the rest of the year’s forward curve remains fairly flat because LNG supply is expected to stay strong, the near-term risk is higher prices. Unlike 2018, when low storage was the main issue, today’s risk is a fast scramble for spot LNG cargoes if a cold snap hits at the same time as even a small supply disruption. This makes close monitoring of short-term weather and LNG tanker flows especially important. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now