12 July 2019
- Total supply, albeit abundant, has shrunk significantly in the last two months. LNG volumes remain well below the 14K GWh threshold and are not expected to spike any time soon. The E-NW spread is raising, signalling gas tightness over north-western Europe. Storage re-stocking rates have curbed relative to the above-average levels observed in previous weeks, hence absorbing less gas surplus.
- High pressure areas will form over north-western Europe and try to expand towards the rest of the continent during week 29. This should make the gas/wind spread increase, supporting a raise in gas demand. To the contrary, temperatures over continental Europe will initially remain subdued, hampering demand. However, these will increase into week 29 to end up above the norm. The climate spread is expected to turn negative, further fostering demand.
- Macroeconomic conditions look better than how we left them a month ago. The country-weighted PMI is trying to climb and is now above 47. However, the latest figures on the industrial production are still negative. A negative trend is also exhibited in our BE index. The short-term (next 10 days) energy intensity index is expected to climb, supporting demand.