European natural gas demand and inventories rose in July

Demand for natural gas in the EU and UK rose in July compared with June, but inventories rose at a faster pace as Europe moves to stockpile gas ahead of winter, the latest data from the Joint Organizations Data Initiative showed on Wednesday (THURSDAY).

EU and UK natural gas demand rose by 1.3 billion cubic meters from June to 200.1 billion cubic meters in July, according to JODI data shared by the Riyadh-based International Energy Forum (IEF).

Globally, natural gas demand rose 12.9 billion cubic meters in July from June, settling at a higher than 5-year seasonal average.

Natural gas inventories in the 45 countries that voluntarily update their self-reported data to JODI rose by 9.7 bcm month-on-month in July, marking new all-time highs compared to the last seasonal period of 5 years.

In the EU and UK, gas stocks rose by 7.1 bcm month-on-month and 0.38 bcm year-on-year to 7.6 bcm more more than the 5-year seasonal average, the data show.

EU storage levels were 93.4% full on September 16, according to data from Gas Infrastructure Europe. This is reassuring for Europe ahead of the winter heating season, but the stored gas cannot cover the entire winter consumption. Europe therefore needs fairly steady gas supplies from Norway, now its main gas supplier, and LNG cargoes.

On the production side, global natural gas output rose 4.7 bcm month-on-month in July, but fell 1.2 bcm year-on-year. The annual decline was driven by the United States, Egypt, Indonesia, the United Kingdom and Canada.

Earlier this year, when prices hit multi-year lows in late winter and early spring, US natural gas producers and pipeline operators acknowledged that there was an oversupply in the market. But they believe gas will continue to be in demand domestically and internationally for decades to come.

By Tsvetana Paraskova for Oilprice.com

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