Bearish Drivers
· Greater LNG supply to NWE in May
· Warmer weather forecast and higher demand destruction in the residential sector
· Expected European Parliament’s approval to decrease storage requirements from 90% to 83% fullness
· Switch in SUM25-WIN25 spreads to contango in April, from backwardation last winter, supporting robust injections this summer
Bullish Drivers
· NWE aggregated storage inventory is forecast to reach 83% by 1 November 2025
· Lower imports from Norway due to a scaling up of seasonal maintenance works in May
· Stronger exports from NWE to neighbouring countries on the Continent
European gas prices fell roughly 11% in April amid heightened global market volatility, triggered by Donald Trump’s announcement of reciprocal tariffs on April 2. The move sparked fears of a trade war, erasing trillions in global equities and driving a sharp commodity selloff. European May gas prices dropped 24% in just seven sessions, hitting lows last seen in September 2024. Meanwhile, draft EU storage rules propose more flexible injection targets, potentially allowing a 7–11% deviation from the 90% requirement or shifting the deadline to October–December.
Since April 11, gas prices have partially rebounded as Trump eased his tariff stance and signalled readiness for bilateral talks. Market sentiment improved further with the withdrawal of threats against the Fed Chair and more optimistic trade signals from Washington. Structurally, the gas market has flipped from backwardation to contango, with near-term prices trading below winter contracts—encouraging storage injections amid ongoing uncertainty.
In May, European gas demand is set to decline despite cooler weather, driven by an 18% drop in residential consumption and a combined 102 GWh/d reduction in industrial and power sector usage. Increased global LNG availability—boosted by weaker Asian demand and strong U.S. output—has raised sendout projections for NWE and the UK by 1 bcm, while Norwegian exports are expected to fall by 222 GWh/d due to maintenance. With a looser market balance, daily storage injections are forecast to rise to 1,688 GWh/d, pushing NWE storage to 233 TWh (41% full) by month-end—53 TWh higher than earlier estimates. A shift from backwardation to contango is supporting stronger summer injections, with stocks projected to reach 83% fullness by November, below the EU’s 90% target but well above previous forecasts. Only an unusually cold winter would significantly tighten the market, while mild or average conditions suggest a bearish outlook. Spot prices are expected to remain soft, with a widening NBP discount to TTF, and potential EU approval of lower storage targets could add further downward pressure.