(Bloomberg) -- Europe’s natural gas reserves are almost full, helping to cap a recent price rally driven by concerns over supply risks.
The continent’s storage levels reached 90% of their capacity on Aug. 19, according to the latest data from industry group Gas Infrastructure Europe. That’s more than two months ahead of the European Union’s Nov. 1 goal of reaching that level.
Benchmark gas futures hovered near a two-week low early Wednesday after losing 4.7% a day before, the most since June. The market has proven sensitive to supply disruptions this summer, with concerns over remaining flows from Russia sparking a rally earlier this month.
For now, ample inventories are helping to offset supply risks. Storage sites are slightly less full than they were at this time last year — with injections having slowed down over the summer — but still well above their five-year average.
The continent continues to face risks related to sudden interruptions, though. European countries are still debating how they might replace Russian pipeline flows once a transit agreement between Moscow and Kyiv expires at the end of the year.
Europe’s top gas provider, Norway, is also heading into a period of heavy maintenance that’s keeping traders on high alert.
“Any disruptions there or unplanned maintenance extensions will likely come with a nervous market reaction,” said Rystad analyst Christoph Halser, adding that the flows are particularly important since Europe has been attracting fewer liquefied natural gas imports.
Dutch front-month futures, Europe’s gas benchmark, inched 0.3% lower to €37.85 a megawatt-hour at 8:42 a.m. in Amsterdam.
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