Gas prices in Europe could plunge as low as $6.70 per million British thermal units MMBtu this summer thanks to a mild winter and ample gas inventories
, Wood Mackenzie has said in a new report. The report states that gas markets kicked off the current year on a more bullish note as colder weather swept through Europe while industrial demand maintained its recovering trend, increasing 12% year-on-year in January and around 6% in February. WoodMac has forecast that household gas demand in Europe will increase by 12 billion cu m bcm in 2024, under normal weather conditions, while industrial demand will grow by 5.
“With storage levels nearing full capacity towards the end of the summer, there will be up to 10 bcm of excess supply that will need to either be piped into underground storage facilities in Ukraine or floated in LNG vessels. This means that a higher summer-winter differential is required to balance the market, compared to what the current forward curve suggests, putting downward pressure on Q3 prices,” Mauro Chavez, Director of Europe Gas & LNG Markets at Wood Mackenzie has said.