Europe is seeing a perfect storm in its natural gas market, due to a combination of factors on both the supply and demand sides.
Demand has increased for several reasons, experts say, including that Europe had a colder winter so people were heating their homes for longer than usual.
That coupled with a phasing out of coal and a bad year for wind production has driven up the need for natural gas.
There are also several issues on the supply side: including less maintenance of oil and gas fields during the COVID-19 crisis and less investment.
There have been concerns that Russia could be using the crisis to lobby for the newly completed Nord Stream 2 pipeline to come online by not sending more natural gas for Europe’s storage.
Russia was the largest exporter of natural gas to the European Union in 2019 and 2020, representing more than 40% of EU imports.
The International Energy Agency (IEA) said that Russian exports to the EU were down from their 2019 levels and that “Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season”.
Consumers who do not have a fixed-price contract on heating and electricity are likely to see increases in their energy bills.
Natural gas not only represents a fifth of Europe’s electricity but is also used for heating and cooking.
Many countries are trying to help consumers amid the rising prices,
But many organisations are concerned that more people may have to choose between paying for heating and feeding their families this winter.
Manager’s Office Team