Cold Weather to Raise Gas Supply Shortage Fears in Europe

This article first appeared on the BNEF mobile app and the Bloomberg Terminal.

  • Colder-than-normal weather forecast for Dec. 20 to Dec. 26
  • LDZ gas demand to be 6% above normal over Dec. 13 to Dec. 26

BloombergNEF expects Local Distribution Zone (LDZ) gas demand in its ‘Europe perimeter’ (Northwest Europe, Italy and Austria) to be 6% higher than seasonal normal levels from Dec. 13 to Dec. 26, 2021, based on 14-day weather forecasts. This will likely push spot gas prices up further amid growing uncertainty around Russian gas flows. Seasonal normal gas demand assumes 10-year average weather.

All of the projected increase in gas demand above seasonal normal is likely to occur in the week of Dec. 20 as temperatures fall. The number of ‘heating degree days’ (HDDs) — the number of degrees the average daily temperature is below 18 degrees Celsius — is 8% higher over that week than 10-year normal levels, according to weather forecasts based on the Global Forecast System model. The number of HDDs is 19% below seasonal normal for the week of Dec. 13.

BNEF’s LDZ demand forecasts for gas year 2021 are based on the latest weather forecasts for the next 14 days, followed by 10-year normal weather assumptions for the remainder of the season.

BNEF Shorts are research excerpts available only on the BNEF mobile app and the Bloomberg Terminal, highlighting key findings from our reports. If you would like to learn more about our services, please contact us.

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.
Sign up for our free monthly newsletter →

Want to learn how we help our clients put it all together? Contact us