Europe's Lowest Gas Inventory Since 2020s Lifts Global LNG Risk for Bakken

Europe is entering winter with its lowest gas inventory of the 2020s, according to OilPrice.com, a development that keeps global LNG risk elevated even as North Dakota operators face a domestic gas market that remains detached from the rally. EU storage sites were 71.6% full in Gas Infrastructure Europe’s Nov. 11 update, with Germany at 58%, well below the five-year average for the start of the heating season.

Asian spot LNG is trading above $30 per million British thermal units, OilPrice.com reported. Rystad Energy’s winter LNG outlook, published this week, stops short of predicting a further rally and tells buyers to plan for a wide range of outcomes instead of one base case. Rystad says Europe will have to pay up to keep US cargoes from being pulled toward Asia, where the loss of Middle Eastern supply has buyers chasing the same Atlantic LNG.

The balance sheet is tight. The International Energy Agency modeled a cold winter combined with continued disruption in the Strait of Hormuz and found that EU storage could fall below 10% of working capacity by the end of March, S&P Global reported. A late cold snap would land when withdrawal rates, which slow as sites empty, are least able to respond.

Demand-side factors may temper the rally. Rystad expects a mild winter in Northeast Asia, where LNG at $30 discourages gas burning and boosts coal use. Bernstein calculated that a super El Niño would cut Japan’s winter heating demand by 19% but its LNG consumption by only 2%. Bloomberg reported Monday that cheap domestic supply is curbing Chinese spot buying, with the national average LNG price near $22, almost $10 below the Japan/Korea Marker.

For Bakken operators and royalty owners, the key signal is the split between global LNG prices and US natural gas. The Energy Information Administration’s Nov. 10 outlook has Henry Hub averaging $2.87 from November through March, 16% below last month’s forecast, while export terminals run near full capacity. Rystad expects a winter peak around $4, and both descriptions point to a US market cut off from the global rally. North Dakota producers therefore face a winter in which global LNG balances remain tight, but domestic gas benchmarks remain low.

Supply risk is centered on the Gulf. October was both the busiest month for LNG tankers leaving Hormuz since February and the worst for attacks on shipping since the war began, OilPrice.com reported. S&P Global Energy tracking cited by Reuters counted 31 laden LNG tankers exiting the strait, up from 23 in September, while the Washington Institute for Near East Policy counted 37 ships struck over the same month. Kpler data put Qatar’s October exports just above 2.7 million tons, against nearly 6.2 million in February. QatarEnergy said in March that Iranian attacks had cut 17% of its export capacity and has since extended force majeure through at least the end of December.

The IEA said supply from outside the Gulf has made up about two-thirds of the lost Qatari and UAE volumes since March, yet global LNG supply is still headed for a 3% drop this year, the steepest on record. Rystad said transits stabilized in October and could allow a supply recovery by the second quarter of 2027, but output is “one escalation away from cratering again.” For Bakken producers, the message is that Hormuz risk can keep Atlantic LNG balances tight, even while US Henry Hub weakness limits the domestic gas-price signal.