The gas crisis is escalating, affecting both Europe and the United States. The issue of natural gas is more relevant than ever!
According to experts at UBS, European gas storage levels are currently below the five-year average. As of February 11, European storage facilities stood at 47%, or 49 billion cubic meters. This is 5% lower than the five-year average and 20% below the levels recorded last year. Currently, the rate of liquefied natural gas withdrawals has increased to 4.2 billion cubic meters, which is significantly higher than last year's figure of 2.1 billion cubic meters and the five-year average of 3.7 billion cubic meters.
UBS analysts estimate that European gas storage levels will be slightly above 30% by the end of the winter. This is a very low level compared to the 58% recorded in late March 2024 and the five-year average of 41%. Lower LNG stocks indicate that Europe will need to import more natural gas.
Despite the EU's implied storage target of 77%, the investment bank projects that the region will need to import 155 billion cubic meters of LNG, 17 billion cubic meters more than in 2024.
The situation in the United States is similarly concerning. According to the US Energy Information Administration, weekly gas stocks in underground storage fell by 100 billion cubic feet to 2,297 billion cubic feet. This slightly exceeded the consensus forecast of 95 billion cubic feet. Total gas inventories are currently 3% lower than the five-year average of 2,364 billion cubic feet. Meanwhile, US storage utilization is at 54%, below the five-year average of 56%.
UBS's American team has updated its LNG balance forecast, raising its 2025 Lower 48 supply estimate to 112.5 Bcf per day from the previous forecast of 111.9 Bcf per day. Demand projections have also been revised upwards to 113.2 Bcf per day, up from 112.7 Bcf per day. Thus, the US natural gas market is expected to be undersupplied by an average of 0.7 Bcf per day in 2025.
UBS reports that the new LNG capacity coming online in the United States, such as Corpus Christi Stage 3 with 10 million tons per year and Plaquemine LNG Phase 1 with 13.3 million tons per year, could help meet Europe's increased demand for gas.
