<article><p class="lead">Italy could have much more injection demand next summer than in recent years if the stockdraw remains brisk in the coming weeks.</p><p>Stocks have been depleted much more quickly than in previous years so far this winter, with inventories of 10.59bn m³ at Stogit's sites this morning well down from the three-year 2 December average of 10.74bn m³.</p><p>Withdrawals climbed further yesterday, as heating demand ramped up and with commercial withdrawal capacity increasing at the start of December. The stockdraw reached 84.2mn m³ yesterday, up from 75.4mn m³/d on 25-30 November and the three-year average for the entire period of 61.5mn m³/d.</p><p>Strong heating demand bolstered withdrawals, with aggregate demand up to 322.5mn m³ yesterday from 283.2mn m³/d on 25-30 November and the three-year 25 November-1 December average of 266.3mn m³/d.</p><p>And colder weather is expected over the next fortnight, which could keep withdrawals quick. Overnight temperatures in Milan were today forecast at minus 2.4°C for 3-16 December, falling below minus 4°C on four days. This would be lower than over the past week and slightly down from the seasonal norm for the period of minus 2°C.</p><p>There may be a firm incentive for withdrawals to remain quick in the coming weeks, with the PSV balance-of-December market having widened its premium to the front-summer contract in recent weeks <i>(see prices graph).</i></p><p>Assuming withdrawals in line with capacity over the rest of the month, inventories would be 7.99bn m³ by 1 January, down from the three-year average for the date of 8.16bn m³.</p><p>Even assuming the stockdraw then moves in line with the three-year January-March average, this would still leave 1 April inventories at 1.36bn m³ — the lowest for the date in the past three years and down from the three-year average of 2.01bn m³.</p><p>Sites elsewhere could be heavily depleted by the end of the winter as well. Withdrawals at facilities operated by Ital Gas Storage began yesterday at 1.2mn m³, while withdrawals at Edison Stoccaggio's sites rose to 8.8mn m³ from an average of 7.1mn m³/d on 25 November–1 December.</p><p>There could be an incentive for brisk injections next summer, as the PSV summer 2021 market has held a wide discount to the winter 2021-22 price, although the differential has narrowed considerably since the start of October. </p><p>And there may be potential for inventories to enter the withdrawal season at a new high, if Stogit proceeds with plans to <a href="https://direct.argusmedia.com/newsandanalysis/article/2164227">expand</a> working gas capacity. </p><p class="bylines">By Samar Ahmed</p><p><div class="picture"><div><span class="pic_title">PSV day-ahead premium to summer 2021</span> <span class="units">€/MWh</span></div><img src="https://argus-public-assets.s3.amazonaws.com/2020/12/02/psvday-aheadandq121premiumtosummer202102122020052220.jpg"></div></p></article>
