Record El Niño forecasts push European gas prices lower, but analysts warn storage gap looms

European winter gas forward prices have fallen to their lowest levels of the year as forecasts point to what may be one of the strongest El Niño events ever recorded, but energy analysts warn that only exceptional warmth would be enough to offset gas storage levels sitting well below where they were a year ago.

The continent enters the 2026–27 heating season in a tight spot. Gas storage stands at around 69 percent of capacity, compared with more than 80 percent at this point last year, according to data from the think tank Bruegel cited by the Financial Times. War in the Middle East has disrupted oil flows and trapped Qatari liquefied natural gas — accounting for roughly a fifth of global supply — lifting summer prices and discouraging extra storage injections.streamlinefeed+1

A High Bar for Relief

Rystad Energy finds that European winter temperatures would need to rise at least 2°C above the historical average before LNG demand could fall to or below last winter's level. Under its base case, which assumes storage reaches 76 percent by November 1, the region would need to increase LNG imports by approximately 15.15 million tonnes year-on-year through June 2027. Even a moderate El Niño delivering a 1°C anomaly still implies roughly 7 million additional tonnes of imports compared with last winter.rystadenergy+2

Current forecasts put El Niño probability above 90 percent, with an 81 percent chance the key temperature index reaches at least 2.0°C, according to Rystad. The World Meteorological Organization has described the developing event as potentially "off the charts," with Secretary-General Celeste Saulo telling reporters this month it "may be stronger than anything since our monitoring began".reuters+1

Weather Alone Is Not a Strategy

A Reuters analysis noted that stronger winds associated with El Niño could boost European wind power generation and reduce gas burn, while LSEG forecasters project warmer-than-normal temperatures across continental Europe through the winter. Natural Gas Intel reported that warmer forecasts on both sides of the Eurasian market have compressed the spread between European and Asian gas futures, with Europe outbidding Asia for flexible LNG cargoes despite thin storage.streamlinefeed+1

Yet Rystad cautioned that even the powerful 2015–16 El Niño coincided with a severe cold-air outbreak across East Asia, a reminder that global patterns do not guarantee uniform local outcomes. A UK Government Office for Science assessment published on September 17 echoed the uncertainty, finding an increased likelihood of wetter, stormier conditions in autumn and early winter but a greater chance of colder spells later in the season.reading+1

As the Financial Times's Lex column put it, borrowing a line from Mike Tyson: everyone has a plan until they get punched in the face. Storage incentives, demand-side tools and supply diversification remain the only levers Europe controls before November — and the continent's largest energy hedge remains a Pacific Ocean current it does not control.streamlinefeed