It looks as if this year’s weather is paying off the debts accumulated during the winters of 2019 and 2020 when the European gas market lost a sizeable portion of heating demand.
Although the winter has already passed, it is still early to disregard the temperature factor. This can be seen clearly in the Champions League quarter-final between Bayern and PSG that was played on 7 April amid heavy snowfall and below-freezing temperatures.
Another cold snap in Europe has resulted in higher prompt gas prices earlier in the week. Notwithstanding the losses made in the 7-9 April trading sessions, the average weekly TTF Day-Ahead rose by 5.5pc as compared to the previous week.
As the weather was getting colder, heating demand in NWE and CEE jumped by more than 40pc since late March, forcing players to interrupt net injections into the storages. Approximately 850 mcm was withdrawn from the regional facilities over the period from 6 to 9 April. The figure could have been even higher if the weather had been less windy at that time.
There is nothing unusual about the weather having a significant influence on the gas market environment during the shoulder period. But it is exactly the weather that acts as a ‘black swan’ event this year, having made waves in Asia and the US in January-February and continuing to make its presence felt in Europe for the fourth month in a row.
The opinions expressed in this blog are mine only and do not reflect the views of my employer.
For a look at all of today’s economic events, check out our economic calendar.