Unusually cold weather continued to sweep across Central Europe in March, supporting gas demand and encouraging a heavy stockdraw.
HDDs in the region were between 17% and 35% higher y/y in March, and well above the past five-year average. Austrian demand was up by 0.24 bcm (35%) y/y at 0.90 bcm, while demand in the Czech Republic rose by 0.3 bcm (39%) y/y to 1.0 bcm.
However, net imports were largely unchanged y/y for most countries in the region, as the bulk of the increase in demand was met by a heavy stockdraw. While net inflows into the region were largely flat y/y, total Russian flows into Europe rose by a significant 3.2 bcm y/y (26%) to 15.4 bcm—the highest on record—with 2.1 bcm of that gas transited via Ukraine, the most since March 2016. Russian flows into Europe have been stronger y/y for most months since 2015, but since Gazprom was granted additional Opal access, most of the increase has been via Nord Stream. March was the second time since September 2017—shortly after the Opal decision—that Russian net flows via Slovakia have been higher y/y, totaling 3.7 bcm, or 1.6 bcm (72%) more y/y. Russian receipts via Poland also rose by 0.3 bcm (8%) y/y to 3.9 bcm. Nord Stream flows were up by 1.1 bcm, or 28% y/y at 3.2 bcm.
High gross Russian imports into Slovakia supported strong flows of 3.8 bcm (+1.47 bcm y/y, 63%) onward into Austria, but Austrian net imports were broadly unchanged y/y owing to higher exports into Germany and a 1.1 bcm (67%) y/y increase in Austrian exports into Italy. Similarly, net imports into the Czech Republic edged down slightly (-0.16 bcm y/y, 9%) and net imports into Hungary slipped by 90 mcm (9%) to 0.90 bcm because a rise in gross exports outstripped higher gross imports in both countries.
Gross reverse flows into Ukraine from Slovakia slipped by 0.8 bcm (64%) y/y to 0.4 bcm, while exports into Ukraine via Hungary rose by a small 90 mcm to 0.16 bcm.
In terms of LNG, port receipts into Poland nearly doubled y/y to 0.19 Mt from 0.10 Mt in March 2017, supporting a hefty 90 mcm (63%) y/y increase in LNG regasification to 0.23 bcm, the highest monthly volume since the terminal came online in 2016. Lithuania received a very small 0.02 Mt last month, compared with 0.06 Mt the same time last year.
Given high demand and flat y/y net imports, the region drew heavily from storage last month, drawing stocks down by 3.2 bcm, or 2 bcm more y/y. Stocks finished winter at 4.4 bcm, down by 0.6 bcm y/y compared with the 1.4 bcm y/y surplus with which the region began March.
Tightness in the Northwest European markets owing to a lack of storage flexibility in the UK and a tighter Groningen cap buoyed TTF prices last month, leaving the TTF D+1 price above the AVTP on all but five trading days in March. The TTF-AVTP D+1 basis averaged +1.42 €/MWh—a significant reversal from the -1.06 €/MWh it averaged the same time last year—although the average was skewed by a TTF-AVTP D+1 closing basis of +17.25 €/MWh on 1 March, when exceptionally cold weather and a series of supply outages sent prices at Northwest European hubs skyrocketing. Excluding that day, the TTF-AVTP D+1 basis averaged +67 cents/MWh, still a considerable y/y difference, which helped support the strong flow of gas from the CEE to the NW Europe gas markets.