Dry and cold winter: gas demand in Europe may rise due to low temperatures – WSJ

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Dry and cold winter: gas demand in Europe may rise due to low temperatures, — WSJ

According to journalists, forecasts indicate that that the cost of gas in Europe may not return to those indicators that were recorded in the summer.

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One of the first closely watched seasonal forecasts is that the UK and Northern Europe will experience dry and cold weather during the winter. This could increase pressure on governments and companies managing natural gas supplies on the continent. The Wall Street Journal writes about it.

The UK Met Office has reportedly said there is an increased chance that the next three months will be colder than usual, with average temperatures ranging from 4 degrees Celsius to just below 6 degrees Celsius. This is slightly below the average for the past five years. The forecast agency added that the weather is likely to be drier than usual, with less chance of heavy rain between November and January.

Journalists noted that no forecast is final and so-called seasonal forecasts contain reservations. They are not as accurate as one to five day forecasts.

As Caroline Bain, chief commodities economist at Capital Economics, said, everything suggests that demand for heating gas will grow.

“People are not going to turn off the heating if they are cold, and therefore we will probably get a steady demand associated with heating,” she said.

The publication writes that gas prices continued their recent decline on Monday, caused by large stocks of fuel that Europe has accumulated during the year. Estimated wholesale gas prices in the Netherlands fell by 9%. Prices in the UK fell by 7%.

Futures contracts are reported to suggest that gas will become more expensive as winter temperatures drop. Prices will not return to the levels recorded in August.

Journalists recalled that after Russia's invasion of Ukraine, Europe tried to abandon dependence on Russian gas. Meanwhile, Moscow has largely turned off the tap in retaliation for the sanctions. This has sparked a scramble by governments and utilities to use gas from other sources and encourage residents and businesses to conserve fuel.

As a reminder, Russia cannot find buyers for its oil. The publication writes that over the past four weeks, the volume of purchases of Russian oil from China, Turkey and India has decreased.