The UK's energy and natural gas demand is set to jump at the start of next week following an unusually warm start to the year in Britain and most of Europe.
Temperatures are expected to average around seasonal norms early next week, with London set for 6.5 degrees Celsius, or 43.7 F, according to forecasts from Maxar Technologies cited by Bloomberg. This would be only slightly above the average for this time of the year compared to this week's temperatures, which are 5.2 C above seasonal averages.
So far this year, Europe has enjoyed a warm start to 2023, with balmy weather well above seasonal averages across the continent.
A warmer-than-usual start to the winter in Europe and Asia and forecasts of mild weather in the United States following the Christmas winter storm have eased concerns about natural gas shortages at the start of 2023.
Natural gas prices in Europe dropped on the first trading day of the year to their lowest level since February 21, 2022, days before the Russian invasion of Ukraine, which upended energy markets and sent gas prices skyrocketing.
Mild winter weather in many parts of Europe, rising wind power generation, and lower electricity consumption started dragging European natural gas and power prices lower last week.
Weather in most of Europe has been unusually warm since the middle of December, and forecasts point to continued mild weather for another two weeks. As a result, gas demand is lower, and gas in storage remains at comfortable levels. Across the EU, gas storage sites were 83.5% full as of January 2, with German storage at over 90%, according to data from Gas Infrastructure Europe. Many countries in the EU have even managed to add some gas into storage in recent days. Demand destruction in the industry has also helped to ease the upward pressure on gas prices in Europe.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More