From the EIA, November 2023:
Relatively full natural gas inventories in the United States and Europe as well as expanded global export and import capacity for liquefied natural gas (LNG) have improved the likelihood that supply will be sufficient to meet demand in global natural gas markets as we enter the upcoming 2023–24 winter season (November–March). However, risks to this balance are associated with possible extreme weather and supply issues.
LNG supplies from new LNG export projects that came online this year or that will start service this winter, in addition to greater output at existing facilities especially in the United States, should help balance global natural gas markets. The addition of new LNG import facilities—both fixed terminal facilities and floating storage regasification units that convert LNG into pipeline-ready gaseous supplies—have increased regional LNG import capacity, especially in Europe. Europe’s natural gas storage inventories are full at the start of the 2023–24 winter season. If normal weather conditions prevail, we expect less natural gas demand for heating in Europe and limited growth in demand from Asia compared with prior years. Under these conditions, the market should remain balanced during the upcoming winter season.*****Even with increasing LNG supplies and larger natural gas inventories, key market uncertainties remain. Sustained colder-than-normal temperatures in one or more regions in the Northern Hemisphere could increase demand for LNG. Unplanned outages at LNG export facilities or key natural gas supply basins due to freeze-offs could decrease supply and potentially disrupt global natural gas balances by creating supply shortages that lead to price spikes. Some major natural gas utilities, especially in Europe, have limited access to long-term, contract-based LNG supply. The lack of long-term contracts increases supply risk during cold weather and price spikes and may also intensify competition for spot LNG between regions. Lack of underground storage capacity in Asia highlights the region’s dependence on real-time LNG flows. If economic activity in China and other markets improves, that could boost regional natural gas demand. Electricity generation from sources other than natural gas (including nuclear, coal, hydropower, wind, and solar) based on fuel pricing could also affect natural gas balances in regional markets.
Last year, exceptionally mild winter weather in the Northern Hemisphere reduced heating demand in both Europe and Asia. In addition to mild weather, an economic slowdown in China reduced LNG imports. High LNG prices reduced the use of LNG imports in other parts of Asia. Europe implemented coordinated demand-reduction measures to offset decreased natural gas pipeline imports from Russia, decreasing the region’s natural gas consumption by more than 15%. Reduced demand in Asia offset increased LNG demand in Europe, leading to a relatively balanced global natural gas market during the past winter.
Overall, more natural gas is in storage than last winter. Europe’s natural gas storage inventories are almost full near the start of 2023–24 withdrawal season. Europe has enacted policies requiring storage operators to maximize storage injections during the refill season to ensure availability of natural gas during the winter. Natural gas storage inventories in Europe (EU-27) as of October 31, 2023, were approximately 3,657 billion cubic feet (Bcf). We estimate this storage volume represents 65 days of natural gas consumption at peak five-year (2019–2023) winter rates and 84 days of natural gas consumption at rates like we saw last winter. The on-site storage capacity at regasification facilities in Japan and South Korea has been consistently full this year. In the United States—an important global LNG supplier—storage inventories exceeded last year’s inventories by 8% as of October 27....
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