Industry Trend Analysis - Low Prices To Support Gas Demand - OCT 2017

BMI View: In order to keep natural gas prices sufficiently low and maintain strong demand, Europe will require high levels of gas from both its major pipeline supply partners and LNG imports . We forecast gas demand to continue to grow in the coming years.

Europe is has been benefitted from lower natural gas prices over 2017, with the UK NBP benchmark trading well under its 5-year average for most of the year to date.

This has also driven the highest level of gas imports into Europe over H1 in the last five years. Germany remains by far the largest market, though it has been growth in France, Italy and Spain that have seen the biggest increases in consumption. A key reason for this was the nuclear outages in France over late 2016 and early 2017 requiring gas power substitution, and a significant reduction in hydropower in Southern Europe due to drought.

Cheap Gas Supported Imports
NBP Month Ahead (GBp/therm)
Source: Bloomberg

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