Europe’s record-low gas consumption is set to fall further in 2023, the IEA says

According to the International Energy Agency, European natural gas demand will collapse next year as high prices force nations to adopt energy-saving measures amid Russia’s supply restrictions.

High gas prices will mean that European consumption will fall by 4 percent in 2023 after collapsing a record 10 percent this year, the IEA said in a quarterly gas report. The declines are most notable in the industrial sector, but also in power generation, pushing global gas demand down 0.8 percent this year.

“Russia’s invasion of Ukraine and the drastic reduction in natural gas supplies to Europe are causing significant damage to consumers, businesses and entire economies, “not only in Europe but also in emerging and developing countries,” said Keisuke Sadamori, director of energy markets and security at the IEA, the report says.

The EU is taking action to deal with the worst energy crisis in decades, escalated by severely reduced supplies from Moscow, once the region’s biggest gas supplier. Europeans face a cold winter as rising natural gas prices have pushed up electricity bills. The EU has called for a voluntary reduction in gas demand by 15 percent compared to its five-year average.

Unless demand is dampened, the region’s storage locations will fall to a critically low 5 percent in February when Russia’s pipeline flows completely halt from November 1, the IEA estimates. Such low inventories could lead to disruptions when there is a cold snap in late winter.

“Gas saving measures will be crucial to minimize storage withdrawals and keep stockpiles at reasonable levels until the end of the heating season,” the IEA said.

Global gas consumption is expected to increase by just 0.4 percent next year, “but the outlook is fraught with a high degree of uncertainty, particularly with regard to future actions by Russia and the economic impact of persistently high energy prices,” the IEA said.

Despite weak demand, Europe’s search for alternative sources is intensifying global competition for LNG. The IEA forecasts that European LNG imports will increase by over 60 billion cubic meters this year, or more than double the global LNG export capacity.

“The outlook for gas markets remains bleak, not least because of Russia’s reckless and unpredictable behavior,” Sadamori said. “But all indications are that markets will remain very tight well into 2023.” Europe’s record-low gas consumption is set to fall further in 2023, the IEA says

Fry Electronics Team

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