The refilling need has elevated gas prices for the summer, typically a period of low demand used to buy gas for storage.
Summer contracts have even traded at a premium to next winter ones in recent months, and injecting LNG or gas into European storage is not expected to make traders any money, Poten and Partners’ Feer said.
“That’s certainly going to discourage storage fills unless that market structure changes,” he said.
The first signs of such a change are perhaps emerging, with Europe’s benchmark forward contracts becoming more expensive than nearer-term ones.
That, “signals that we can actually have incentives to inject at some point in the near future,” Kpler’s Regalado said.
Without such a market-based incentive, governments may need to offer subsidies to ensure stores are refilled, a move previously mooted by Germany.
(Reporting by Nora Buli, Editing by Susanna Twidale and Mark Potter)