Exceptionally mild weather cut gas demand across Central Europe last month, encouraging a fast stockbuild and eliminating the y/y storage deficit.
HDDs for individual countries in the region were between 46% and 64% lower y/y on average in April and well below the past five-year average. It was the warmest April in at least the last 10 years. Austrian gas demand was 0.16 bcm (29%) lower y/y at 0.38 bcm, while demand in the Czech Republic fell by 0.2 bcm (31%) y/y to 0.45 bcm, the lowest for the time of year since at least 2012.
However, net imports into some countries in the region were higher y/y last month, with strong Russian supply helping the region rapidly fill storage. Total Russian flows into Europe jumped by 1.54 bcm (11%) y/y to 15 bcm, just shy of last month’s record 15.4 bcm take. While imports into Germany via Nord Stream have been higher y/y for almost a year, Russian flows transiting through Ukraine also posted impressive y/y increases last month. Indeed, net Russian imports into Slovakia rose by 0.6 bcm (14%) y/y to 4.8 bcm, the highest since December 2013. Russian receipts into Hungary also stepped up, by a considerable 0.22 bcm (42%) y/y to 0.75 bcm.
High Russian imports into Slovakia supported a strong 0.43 bcm (11%) increase in flows into Austria. Austrian exports into Hungary and Slovenia continued to edge down y/y, but exports of Russian gas from Austria into Italy posted yet another strong y/y increase, of 0.4 bcm (15%) to 3.17 bcm, helping offset a sharp drop in Libyan supply. On 2 April, Italian pipeline imports from Libya halted because of maintenance to integrate the second production phase of the Bahr Essalam gas field. The disruption was initially scheduled to last 15 days, but was extended to 5 May. We expect Libyan exports to Italy to recover once the outage ends, and they should increase further once production from the second phase ramps up.
Even amid stronger Austrian exports into Italy, the Austrian net take rose by 0.25 bcm (33%) y/y to 1 bcm. In contrast, the Czech net take edged down by 90 mcm (10%) y/y to 0.78 bcm, owing to stronger gross exports (+0.7 bcm, 39%) into Germany at Waidhaus. Net imports into Slovakia also slipped, by 60 mcm (28%) y/y to 0.28 bcm, as higher exports into Austria and reverse flows into Ukraine offset the increase in Russian takes at Velke Kapusany. Net imports into Hungary and Poland rose by 70 mcm (8%) y/y to 0.95 bcm and 0.25 bcm (27%) y/y to 1.2 bcm, respectively.
LNG imports into Poland grew by 0.09 Mt y/y to 0.19 Mt, supporting another record sendout, of 0.28 bcm (+0.13 bcm, 3%). Lithuanian receipts were broadly unchanged y/y at 0.07 Mt.
Given very low demand and higher net imports into some countries in the region, the Baumgarten region posted a larger stockbuild y/y, eliminating the y/y storage deficit at which it began April. Injections into storage totalled 1.9 bcm in April, 1.2 bcm more y/y. All countries except the Czech Republic made stronger injections. Baumgarten stocks stood at 6.5 bcm on 1 May, up by 0.68 bcm y/y, compared to the 0.5 bcm y/y deficit at the start of the month.
The TTF-AVTP D+1 basis averaged -0.27 €/MWh in April, tighter than the -0.93 €/MWh it averaged in April 2017. A lower Groningen cap has weighed on Dutch production this gas year, tightening the Dutch supply-demand balance and pushing TTF D+1 prices to a premium to the Austrian equivalent for much of the winter. However, a sharp drop in Libyan supply into Italy supported Italian demand for Russian gas transited through Austria, which may have buoyed AVTP prices relative to the TTF last month.