Natural gas demand in Europe is expected to recover marginally in 2021 but is unlikely to reach the levels last seen in 2019 due to factors, such as the resurgence of the Covid-19 pandemic, poor economic recovery, and underground gas storage (UGS) levels.
About 48% of the respondents in a GlobalData poll believe that poor economic recovery would be a major hurdle for gas and LNG demand in the region. The economic recovery in Europe remains low due re-imposition of lockdowns (mainly impacting the service sector among others), relatively low government spending, rising fiscal deficits, and delays in coronavirus vaccinations.
Around 28% of the respondents opined that a potential fall in gas demand in 2021 could be another major hurdle as the Covid-19 pandemic continues to play havoc in the region. Lower consumption for power generation and commercial use were some of the important factors for decline of gas demand in 2020.
Potentially warm winter was voted as another hurdle by 14% of the respondents. Potentially warm weather in the latter part of 2021 could impact gas demand in the region due to the low requirement of gas for heating.
Around 9% of the respondents stated that high underground gas storage levels could be one of the restraining factors for the gas and LNG sector in Europe. Potentially warm weather could result in high UGS levels, impacting the demand.