Gas
China gas reserves ease winter supply pressures
Chinese liquefied natural gas buyers have built up substantial inventories ahead of winter, potentially relieving demand pressures in global markets.
Key points
- China's underground gas storage reached 80 percent capacity by the end of September.
- Lower spot demand from China could ease competition for Asian and European buyers.
- Middle East conflict continues to disrupt LNG flows from the Persian Gulf.
What happened
Chinese liquefied natural gas importers built up strong stockpiles earlier in the year following geopolitical tensions involving Iran, according to industry analysts cited by OilPrice.com. Rystad Energy reported that China's underground gas storage facilities were 80 percent full by the end of September.
This early inventory accumulation could reduce China's demand for spot supplies during the winter months. Weather forecasts also indicate that a super El Niño pattern may raise temperatures in key Asian importing nations like South Korea, Japan, and parts of China, further dampening heating demand.
Why it matters
Reduced spot demand from Asia could offer relief to European markets, where storage levels stood at 74 percent capacity, trailing the five-year average of over 86 percent for this time of year, according to OilPrice.com reporting. Mild winter forecasts in Europe through January 2027 may also help manage import needs.
However, global gas markets remain vulnerable to ongoing disruptions in the Middle East. LNG flows from the Persian Gulf remain approximately 80 percent lower compared to previous years due to constraints in the Strait of Hormuz, keeping European gas prices elevated at levels comparable to the 2022-2023 energy crisis.
What comes next
Market stability will depend heavily on the evolution of the conflict in the Middle East and actual weather conditions across the Northern Hemisphere. ING head of commodities strategy Warren Patterson noted that natural gas markets have not experienced the same supply recovery seen in crude oil flows from the region.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
3.0% of electricity in China came from gas in 2024Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
