Despite the completed Norwegian maintenance, the gas price has taken another big step upwards. The high temperatures in Southern Europe in particular are causing upward pressure on prices. In addition, the International Energy Agency (IEA) has again revised its forecast for European gas consumption.
The price of gas has risen considerably this week. On Wednesday, July 19, the TTF reached a level of €26,96 per megawatt hour. On Tuesday, July 25, the gas price was a lot higher. On that day, the gas price was as much as €31,20, an increase of almost 16%.
The increase in the gas price is mainly the result of a greater demand for electricity from fossil sources. Due to lower production of renewable sources and high demand for electricity for air conditioning due to the heat in Southern Europe, European gas demand is currently relatively high.
The fact that the increase appears to be less than expected compared to mid-June is mainly due to the vigorous work on the Norwegian gas network. Maintenance of the Nyhamna gas plant, which supplies approximately 25% of gas exports to Europe, has been fully completed. However, there is still quite a bit of maintenance planned. It is therefore expected that new disruptions to the Norwegian gas network will again cause upward price pressure in August.
Around the beginning of August, 40 million cubic meters less Norwegian gas will flow to Europe due to maintenance. In August, this lost volume increases to as much as 100 million cubic meters per day, with peaks of up to 174 million cubic meters per day. This excludes any disruptions to the Norwegian gas network.
Savings remain significant
In addition, the International Energy Agency has revised downwards its forecast for European gas demand for 2023. The agency estimates European gas consumption to be around 7% lower than in its previous forecast in May. It is the second time in a row that the agency has adjusted the forecast downwards. In May, the forecast was already lowered by 5%.
It is striking that the lower prices do not seem to hinder the savings. The agency expects consumption to decrease by 4% compared to 2023. On the other hand, gas consumption in industry will recover slightly. The agency expects that further market stabilization will lead to an increase in demand of 2024% in 1,5.