NBP faces winter pressure as EU storage lags and Hormuz cuts LNG flows

European Union gas stocks sit at 67% full, well below the bloc's 80% target for December and the lowest level for this point in the season on record. Shell's President of Integrated Gas, Cederic Cremers, told delegates at Gastech that Europe is approaching the end of autumn with historically low inventories. Equinor executives put a number on the recovery effort, suggesting storage might reach 75% capacity by 1 November, still short of where buyers would like to be before the cold sets in.

The shortfall traces back to two separate problems. First, European buyers did not rush to refill storage this summer as they did after the 2022 Ukraine crisis, because the market has been backwardated (prices for immediate delivery above future prices), removing the financial incentive to stockpile early. Second, the conflict in Iran has restricted Qatari and Emirati LNG cargoes from transiting the Strait of Hormuz, a disruption Shell estimates has removed 36 million metric tons of supply this year alone.

What this means for UK buyers

The chart below tracks NBP day-ahead prices over the past year, giving UK buyers a baseline against which any winter LNG scramble would register first.

The UK is not insulated from this. National Balancing Point (NBP) gas prices track European hub dynamics closely, and any scramble for LNG cargoes this winter will show up in UK forward curves before it shows up in storage data. Fixed contracts agreed now lock in today's pricing; buyers waiting to renew in December or January are exposed to whatever this winter's weather and Hormuz situation deliver.

• European Union gas storage at 67% full, versus an 80% December target
• Equinor's projected 75% storage level by 1 November
• Asian spot LNG prices near $30/mmBtu, up from a pre-war baseline of roughly $10/mmBtu
• Wood Mackenzie's cold-winter scenario of $40/mmBtu, equivalent to roughly $240 per barrel of Brent
• 36 million metric ton supply shortfall linked to Strait of Hormuz disruption, per Shell
• 45-day shipping transit from the US to North Asia, limiting how fast Asian buyers can respond to a cold spell

Asian spot prices have already nearly tripled this year, and Wood Mackenzie chairman Simon Flowers said a colder-than-usual winter could push prices as high as $40/mmBtu, a level he said would start to trigger demand destruction. A milder winter, by contrast, would likely keep prices elevated but broadly close to current levels, according to Flowers. Equinor's Helle Ostergaard Kristiansen told Reuters that a cold winter across both Europe and Asia would force European buyers into direct competition with Asian buyers for US cargoes, though ExxonMobil's Andrew Barry noted the 45-day sailing time to North Asia may slow how quickly Asian buyers can react.

Watch European storage data through late October and November: Equinor's 75% marker is the level to track against the actual outturn. Any further escalation around the Strait of Hormuz, or an early cold snap in either Europe or North Asia, would tighten the LNG market quickly and feed straight into NBP pricing, making this a live factor for anyone with a gas renewal falling due before spring.