Storage levels are falling as a result of the German gas event.

The German gas market manager's meeting with key stakeholders at a trade show has not led to the subsidised gas auctions that could boost the flagging underground caverns.

In the absence of progress, the biggest economy in Europe faces a question mark over its energy supply during the winter months. The country is trying to conserve funds before a general elections.

The slides of Trading Hub Europe (THE) stated that a tender was not planned at this time. However, incentives for new injections during the summer months had been discussed. THE's state supervision must decide and specify these incentives.

The wholesale gas market is interested in THE's action, as European gas prices for the next month are at two-year-highs due to a combination between cold weather and competition from around the world.

The reversal of seasonal prices has made summer filling less appealing, which in turn has led to increased expectations that the state-mandated THE must incentivize gas purchases in order to reach a 90% target by November as stipulated in national and European law.

Gas Infrastructure Europe (GIE) data shows that Germany has the largest gas storage capacity in Europe. However, its sites are only 48% filled, which is a substantial decrease from 72% at the same point last year.

Torsten Frank confirmed that there is no set time or type of action for THE.

In an interview, he commented on a market-driven model.

Frank explained that this would require a careful weighing of the advantages and disadvantages in terms of supply security. It is ultimately a decision of politics. (Reporting and editing by Louise Heavens, Vera Eckert)

(source: Reuters)