Bloomberg: Weak European industry keeps gas demand low

Industrial demand for gas remains weak in Europe’s largest countries despite lower prices. It is being dampened by the economic slowdown and by customers’ shift towards renewable energy sources, Bloomberg reported.

According to data from S&P Global Commodity Insights, gas demand in Germany, Italy, the Netherlands, France, Spain and the UK fell by 9.7 percent year on year in May. This means consumption is lower than last year, when the European Union was trying to save gas to fill storage facilities for the winter.

Although the decline in May was the smallest so far this year, it points to the struggle of European industry to recover from the energy crisis that followed Russia’s invasion of Ukraine. Industrial activity in the eurozone is falling, and there are concerns that some of the drop in demand could be permanent.

S&P also points to specific factors negatively affecting demand in some of Europe’s most dynamic sectors. In the chemicals sector, the slump in ammonia prices encouraged continued imports from the US and Trinidad and Tobago. Seasonal refinery maintenance also reduced gas consumption in May.