The demand destruction goes on: European industrial gas demand fell by 9% since the beginning of this year, a similar drop to Q2 2020, when most of European economies and societies were under strict lockdowns.
The $30/mmbtu gas prices are slowly but surely suffocating the European economy, with the most gas – and energy intensive industries curtailing production amidst deteriorating netbacks.
And while the recovery from the 2020 lockdowns was a rather sharp one, this time slower industrial activity could stay for longer with us, when considering the price outlook along the forward curve.
The steep drop in industrial gas demand also highlights how little flexibility is left in the overall European energy and gas system: price driven demand destruction in industry comes as a last resort before administrative measures start to kick in, such as demand rationing…
What is your view? What is the outlook for the European economy and industry in the current market context? How quick will be the recovery?
Source: Greg Molnar (LinkedIn)