Unavoidable reason: gas prices in Europe will fall throughout the year

Gas prices in Europe could fall to $230 per thousand cubic meters this summer due to the past mild winter and abundant fuel supplies. Moreover, the new Wood Mackenzie report also mentions the reason why stock prices will continue to decline throughout the year.

It said gas markets started the year more optimisticly as cold weather swept across Europe, while industrial demand continued its recovery trend, rising 12% year-on-year in January and about 6% in February.



However, the European energy industry has crossed the threshold of no return, which is why, despite all the positive growth rates, it will be difficult to revive it as an “insatiable” client.

Thus, according to the forecast, gas demand for domestic needs in Europe will increase by 12 billion cubic meters in 2024, while industrial demand will grow by 5,5 billion cubic meters as the recovery progresses. economics EU in the second half of the year. However, 9 billion cubic meters less gas will be used to produce electricity, which means that total demand in Europe will increase by only 7 billion cubic meters. Obviously, this will not be enough to support higher gas prices with record levels of storage.

The worst thing is that overseas this year, especially in the summer, several high-capacity gas production complexes are planned to be put into operation, counting on supplies to Europe. Now their future and profitability are in question, since further pumping the Old World market with fuel will only worsen the situation.

Low prices are unprofitable for American suppliers, who are now faced with falling prices not only at home, but also in the EU. At the moment, the cost of blue fuel on the TTF is 53% below last year’s highs and 83% below the 2022 levels.

Wood Mackenzie's forecast reflects a deep trend and an unavoidable cause: the extinction of European industry, which as a gas consumer cannot be replaced by any utility costs during the winter season.