Italy Plans to Boost Gas Reserves Early Amid Price Rise Concerns
(Bloomberg) — Italy is moving to boost its gas reserves ahead of the official stockpiling season, as concerns that prices are set to remain elevated for longer dominate the market.
The country, which hosts the European Union’s second biggest storage sites after Germany, plans to bring forward gas storage auctions for next winter as early as February, Energy Minister Gilberto Pichetto Fratin said in a parliamentary hearing. Europe’s stockpiling season normally starts in April, when heating needs decline, and runs until the end of October.
“In order to mitigate the effects associated with these dynamics, we are evaluating with the offices of the Ministry of the Environment and Energy Security the possibility of bringing forward the timing of the assignment auctions for at least part of the storage capacity,” Pichetto Fratin said.
Gas Inventories
Maintaining sizable fuel inventories has become crucial for Europe’s energy security since it lost most Russian pipeline flows, as it provides a cushion against demand spikes during the heating season. The move also follows discussions that Germany’s market manager Trading Hub Europe plans subsidies for rebuilding gas inventories, adding pressure on other gas-storing nations in Europe struggling to replenish reserves.
That sent the premium for the summer contracts over the next heating season to new highs, reaching €5.40 a megawatt-hour, according to broker data compiled by Bloomberg.
The region’s vast underground storage sites — which act as a buffer against tighter flows — are just over 58% full compared with about 74% a year ago. While there’s no risk of an immediate shortfall, the rapid depletion may make stockpiling more challenging ahead of the next heating season and risks impacting short-term prices.
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