Pipelines Dip as LNG Rises in NW Europe: Marex

Europe's imports of pipeline gas remain low, down by 22% in northwest Europe and by 17% in eastern Europe, compared with the same week last year. But according to analysis by Marex Spectron published March 19, any deficit "is clearly balanced by steady rates of LNG imports, which have however declined on a weekly basis." 

It says the oversupply is now small, as storage destocking rates are around the norm after several weeks of lower than normal withdrawals. And "for the first time during the 2019/20 winter season, high pressure cells will build up over northern Europe and Scandinavia, pushing the jet-stream away from continental Europe and the UK. This will significantly decrease the wind output, supporting the indirect demand. Temperatures are also set to dip."

But the positive impact on gas demand will be offset by economic stagnation, it warns. "Locally, Europe has been showing a decent pick up in activity.... However, domestic demand will likely shrink due to the total or partial lockdown of many countries – this will certainly have a negative impact on all of the indicators that we monitor, and will influence the performance of gas demand for the weeks and months to come."