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EU Gas Price Cap Could Affect Winter Demand Cuts

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The uncertainty over whether the EU will implement price caps on wholesale natural gas is weighing on the potential to curtail demand significantly during the upcoming winter season, industry sources tell Energy Intelligence. Europe is expected to see reduced to no Russian gas supplies during the storage withdrawal cycle, which lasts from October to March, straining its ability to cope with the usual weather-dependent consumption. Market sources are confident Europe will be able to get through the high-demand winter period without any severe supply shortages. But this does not fully avoid the possibility of continued pricing volatility. “It's a mixed picture. Energy [price] caps will limit demand destruction,” a Europe-based trader says. However, the trader believes that the EU will nonetheless try to limit demand wherever possible.

Topics:
Gas Demand, LNG Demand, Gas Inventories, Gas Pipelines, LNG Supply, Ukraine Crisis
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