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Europe’s natural gas demand could begin to rise this winter with higher electricity consumption in major markets and easing industrial demand destruction in the Eurozone, analysts and industry professionals have told Bloomberg.
Higher demand in Europe this winter could tighten the global LNG and gas markets.
Gas inventories in the European Union are nearly at full capacity at the storage sites, but supply risks from the recent strikes at Australian LNG export facilities and the Hamas-Israel war have kept the European market on edge and prices on a trajectory of high volatility.
A survey of economists carried out by Bloomberg has shown that the experts believe the plunge in industry gas demand could ease early next year. In addition, BloombergNEF sees power consumption returning to levels from before the energy crisis in some key European markets.
On Monday, the front-month Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, were down by 3.5% at 12:52 p.m. GMT, but traders are still carefully looking at any signs of supply disruptions and the market continues to be nervous just ahead of the winter.
Weather is one of the biggest unknowns, Colin Parfitt, vice president for midstream at Chevron, told Bloomberg.
“We’re not home free yet. There is a risk of volatility,” Parfitt said.
Last month, Vitol Group’s chief executive Russel Hardy said that some of the lost European demand for natural gas due to the energy crisis and record-high prices could never return.
“For gas, demand has plummeted in Europe, with double-digit percentage reductions. We expect some of the lost demand to be permanent,” Hardy told the Energy Intelligence Forum.
Gas supply disruptions continue to be a risk for Germany, the chief executive of the country’s biggest utility, RWE, said earlier last month.
“We don't have any buffer in the gas system,” RWE’s chief executive officer Markus Krebber told German publication WirtschaftsWoche, adding that Europe’s biggest economy must accelerate the construction of gas import infrastructure to avoid future shortages.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.