New forecasts detail a rosier path for Europe to cope with the risks of Russian gas imports suddenly evaporating, but it will still have plenty of challenges ahead to restore storage levels before next winter.

A report released Friday by consultancy Wood Mackenzie Ltd. suggests a combination of a mild winter, a bevy of liquefied natural gas (LNG) cargoes and improved Norwegian gas production have slowly helped to replenish European gas storage inventories. 

If the continent keeps receiving flows of Russian gas, Europe could even end this winter with gas storage levels back within the five-year average range. Wood Mackenzie predicts Europe could stack up to 27 billion cubic meters (Bcm) of gas by the end of March.

Europe’s Position Improves

Principal Analyst Kateryna...