Highlights

  • Winter demand in Europe will continue to decline
  • Output from regional producers will fall over the coming months
  • Storage levels remain high in most of the region, while stocks in Ukraine continue to fall
  • European hub prices will see little upside over the coming weeks

Economic overview

Weak economic growth in 2015 will do little to support gas markets in Europe.

GDP* - annual % change

  2013 2014 2015 2016
France 0.4% 0.4% 0.8% 1.5%
Germany 0.2% 1.5% 1.1% 1.8%
Italy -1.9% -0.4% 0.2% 1.0%
Netherlands -0.7% 0.8% 1.4% 1.6%
Spain -1.2% 1.3% 1.7% 1.9%
United Kingdom 1.7% 3.0% 2.7% 2.5%
*Real GDP. Source: OECD Economic Outlook, November 2014

While some of Europe’s leading economies could see improved growth next year, the picture for the region is mixed, according to the latest outlook from the OECD. France, Italy, the Netherlands and Spain could all increase their rates of economic expansion next year, whereas Germany and the UK are expected to see reduced economic growth. The UK’s GDP growth is expected to be 3% in 2014 and 2.7% in 2015. Germany’s GDP growth could decline from 1.5% in 2014 to 1.1% in 2015. As gas demand is declining in Europe’s major markets, falling GDP growth from the region’s two largest consumers will further weigh on regional gas consumption in 2015.