BAKU, Azerbaijan, July 24. European gas demand remains significantly below pre-crisis levels and is on track for another year-on-year decline in 2024, Trend reports citing the Oxford Institute of Energy Studies (OIES).
Although signs of recovery are evident in the industrial sector, this growth is being offset by a continuous decline in the power sector. As of the end of H1 2024, gas demand in the EU-27 plus the UK dropped to an annualized 387 Bcm, roughly 100 Bcm lower than pre-crisis levels in 2021.
Gas consumption fell by 6.4 percent year-on-year in Q2 2024 (a decrease of 5 Bcm), following a 1.2 percent year-on-year decline in Q1 2024 (a decrease of 1.6 Bcm), despite lower year-on-year gas prices up until May. The decline in consumption varied across Europe, influenced by country-specific factors. Among the seven largest gas markets, which account for approximately 75 percent of regional demand, Poland stood out with higher gas demand growth in H2 2023 and Q1 2024. However, a reduction in gas used for power generation was the primary driver of the overall decline in Q2 across these markets.
In the industrial sector, gas demand increased by almost 4 percent in Q2 2024, driven by the petroleum and fertilizer industries, while demand in other gas-intensive sectors remained weak. For the remainder of the year, lower year-on-year gas prices are expected to stimulate some industrial gas demand. However, EU manufacturing output remains low, particularly in the largest gas-consuming sectors.
Despite these dynamics, OIES projects that overall European gas demand will continue to face challenges, with any industrial sector recovery likely overshadowed by declines in other areas.
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