BAKU, Azerbaijan, Mar. 20
By Leman Zeynalova - Trend:
Growth in European gas demand in 2020 will be limited to just about 2 billion cubic meters (Bcm) year on year, short of previous expectations for a 6 Bcm increase, Trend reports citing Rystad Energy, an independent energy research and business intelligence company.
“European gas demand in 2020 is likely to drop by 0.7 percent compared to our pre-coronavirus forecast. The continent’s gas demand for last year is calculated at 554 Bcm and Rystad Energy has now revised its 2020 forecast to 556 Bcm, down from 560 Bcm before coronavirus-related restrictions were put in place,” reads the report released by the company.
Rystad Energy’s most likely scenario assumes most of the continent’s countries go into lockdown for 30 days during the two-month period of March and April. “As people stay home and businesses close their doors, demand will decrease for power generation and for burning in the industrial, commercial and residential sectors.”
The two months will see a combined total loss of 4.1 billion cubic meters (Bcm) in expected demand, a 4.4 percent downgrade compared the company’s pre-coronavirus estimates. “That would translate to Europe’s total demand being limited to 89.2 Bcm from a previously expected 93.3 Bcm for the period.”
If lockdowns last for only two weeks, which Rystad Energy now finds increasingly unlikely, European gas demand for the above two-month period is set to be 1.8 percent lower, or down by 1.7 Bcm, versus what Rystad Energy expected before the virus appeared.
“During the duration of the lockdown, power consumption is expected to drop 7 percent overall leading to a similar drop in gas demand from this sector. Gas use for industrial consumption is set to decline 5 percent, for commercial consumption 20 percent and for residential consumption 2 percent,” said the report.
The company believes that there is a risk of seeing prices drop to a level of $2.3 per MMBtu for a short period of time while the necessary adjustments to balance the market occur.
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