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Gas demand from all customers of French utility giant Engie has dropped in recent weeks amid surging natural gas prices in Europe as Russia slashed deliveries, the French company said on Friday.
"Gas demand has declined among our customers, whether its households, small businesses or large manufacturers," Engie's chief executive Catherine MacGregor said on an earnings call today, as carried by Bloomberg.
The drop in demand is part due to gas and energy conservation, utilities and industries switching to other fuels, and the "price signal," MacGregor said.
Gas prices in Europe resumed rallying in June after Russia cut supply via Nord Stream to 40% of capacity. This week, prices soared again after Russia said that gas supply via Nord Stream would be cut to just 20% of the pipeline's capacity, days after Gazprom restarted the pipeline at 40% capacity after regular 10-day maintenance. The Russian explanation for the even lower gas flows to Europe is that another turbine at a compressor station was sent for repairs, while the one that Canada returned from repairs has yet to be installed.
The EU urges member states and EU consumers to voluntarily reduce gas and energy consumption to give a chance to countries to fill their gas storage sites in time for the winter heating season.
The observed decline in gas demand in recent weeks points to "certain flexibility on the demand side," Engie's MacGregor said on the conference call.
In its earnings release today, Engie said that it had significantly reduced its exposure to Russian gas procurement. Engie now has just 4% of its total European requirements depending on Gazprom for the coming winter, which is "now well within the normal range of volatility that the Group manages on an ongoing basis."
"Similarly, for the winter of 2023-24, the Group is confident that additional volumes contracted through new supply sources including LNG, together with an expected decrease in demand will help replace the need for Russian volumes and reach required its storage levels in case of a full cut of Russian flows," the French group said.
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.
"Bigger than Toyota."
Be interesting to see how Ford Motor Company responds as they invented this market for the SUV and Pickup Truck form factor. Plus Ford Motor Company has the pure BEV Ford Lightning now. Anyhow I wouldn't be surprised to see US gasoline prices hit in excess of $12.00 US Dollars per gallon in response goes without saying as well. Quite the lesson in Failed Economic Policy! Meanwhile in Venezuela which has/had the largest oil reserves on Earth gasoline still costs around ten cents per US gallon.