Gas consumption in the EU increased by 8.8% y/y in January

In January 2024, the European Union countries increased gas consumption by 8.8% compared to the same period in 2023. The figure was the highest in the last two years. This is evidenced by Eurostat data, Argus.Media reports.

Of the five largest consumers – Germany, the Netherlands, Spain, Italy, and France – consumption increased in the last four, most of all in the Netherlands – by almost 22%. Overall, consumption increased in 25 EU countries.

Germany, according to Eurostat, reduced gas consumption by 2% in January. At the same time, according to the Trading Hub Europe (THE), the total demand for gas in the country in January increased by 16% y/y. Electricity generation from gas in Germany increased to 6.5 TWh from 5 TWh in January 2023.

Among the other bloc members, the Baltic States and Finland saw the largest growth, mainly due to a significant deterioration in weather conditions.

Gas-fired electricity generation in the EU in January was 16% higher y/y as consumers preferred gas to coal. Overall, January was a moderate month in most European countries, which helped keep gas consumption low. Although demand increased by almost 9% y/y, it was down 15% compared to the average for January 2017-2021.

According to MEA forecasts, in 2024, European gas demand could grow by 3% compared to 2023. The cold snap at the beginning of the year in most of Europe led to a significant use of gas reserves in the first half of January. However, the unfavorable weather conditions have already passed, and February’s figures should be moderate.

Analysts are positive about Europe’s prospects for this heating season. According to Bloomberg columnist Javier Blas, despite the cold weather in Europe, winter is over for European gas traders.

Under current trends, Europe will meet spring with half-full underground gas storage facilities, while the decade-long average is only 35%. However, although European gas prices have fallen significantly from the record highs of the last two winters, they remain well above the 2010-2020 average of €20.1 per MWh.