Raymond James Energy Stat of the Week
by J. Marshall Adkins
Energy Stat: European Gas Demand Languishes Near 20-Year Lows - And That's Before Brexit
July 11, 2016
It is no secret that U.S. natural gas demand has chronically disappointed expectations in recent years, especially in the industrial sector (steel industry travails) and LNG exports (slower-than-expected scale-up). Well, look on the bright side: at least it's better than in Europe. In our Stat of the Week from July 2015, we highlighted some shockingly negative statistics about the European gas market: in particular, 2014 being the lowest point for EU gas consumption since 1995. With a year having passed, today we revisit this theme. The verdict? To quote Franz Kafka: "There is an infinite amount of hope in the universe ... but not for us." Although 2015 showed a bit of recovery in demand, the overall picture is still glaringly bearish. To be clear, this is not because of the Brexit referendum's outcome, but rather underlying long-term trends that go well beyond day-to-day politics. The epic weakness in European gas demand carries read-through not just for energy companies in the region, but also the entire global LNG value chain.
This is a summary of a much more detailed commentary. Please contact your financial advisor for the full report.
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