Will El Niño be the saviour of Europe’s energy market?

{"text":[[{"start":3.62,"text":"Everyone has a plan until they get punched in the face. The saying, attributed to Mike Tyson, is a reasonably good description of how Europe — pummelled by successive energy crises — is positioned ahead of the coming winter. The continent’s strategy, insofar as it has one, is to hope it isn’t very cold."}],[{"start":22.98,"text":"To be fair, it is hard to pursue long-term plans when one is reeling from a one-two blow. Europe, already scrambling after the war between Russia and Ukraine removed a key supplier from its portfolio, has been hit by the war in Iran. In addition to disrupting oil flows, the war trapped Qatari liquefied natural gas accounting for about a fifth of global supply. That raised the fuel’s price: in August, prices at the European bourse were almost double those in August 2025."}],[{"start":53.1,"text":"High summer gas prices discourage operators from buying extra to store for winter. In any case, many hoped the Strait of Hormuz would reopen before the weather turned: the sudden arrival of the locked-in volumes would drive winter prices below summer ones, exposing traders to a potential loss. As a result, Europe’s storage is 69 per cent full, according to think-tank Bruegel, compared with more than 80 per cent this time last year, and the coming winter is looking uncomfortably tight."}],[{"start":null,"text":"

"}],[{"start":83.02,"text":"For an idea of the numbers involved, just think that Europe needs about 250bn-260bn cubic meters (bcm) of gas during the average winter, Lex calculates based on historical numbers from the Oxford Institute of Energy Studies. Over the same period, it generally produces or buys perhaps 200 bcm of the stuff, and closes the remaining 50-60 bcm gap by taking gas out of storage."}],[{"start":108.98,"text":"That may not seem terribly daunting considering that there are currently over 70 bcm of gas in storage. Trouble is, a long cold winter can add perhaps 25 bcm to gas demand. And cold snaps can be correlated across the Northern hemisphere, meaning more competition between European and Asian consumers for the LNG that is available."}],[{"start":129.82,"text":"Unsurprisingly, Europeans are keeping a keen eye on the weather, and in particular this year’s super El Niño phenomenon. The currents and climate pattern, which sees sea surface temperatures rising particularly in the tropical Pacific Ocean, is generally associated with warmer temperatures, at least in the earlier phases of autumn and winter. On the other hand, the second half of an El Niño winter has been known to be cold and snowy."}],[{"start":154.9,"text":"More broadly, sniffing the air and feeling one’s joints is a poor substitute for an energy plan: banking on the weather, as Britons know all too well, is a losing strategy."}],[{"start":168.22,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789709995_8433.mp3"}