Highlights

  • Weak seasonal demand is expected to persist through the peak winter period
  • Regional production will decline on an annual basis in early 2015
  • Although rates of withdrawal have been faster than last year, total regional storage levels are still high
  • Hub prices across Europe are expected to remain subdued in the coming weeks

Economic overview

The price of oil will put further pressure on the Russian economy in 2015.

Russia has shown the first signs of having entered a recession and the outlook for the country’s economy this year and next is closely linked to the price of oil. The country’s economy contracted by 0.5% in November 2014, marking the first fall in GDP since October 2009. The Russian economy could contract by 3% in 2015 and by 1% in 2016, according to the latest GDP forecasts from the IMF. 

GDP growth

  2013 2014 2015 2016
UK 1.7% 2.6% 2.7% 2.4%
Germany 0.2% 1.5% 1.3% 1.5%
France 0.3% 0.4% 0.9% 1.3%
Italy -1.9% -0.4% 0.4% 0.8%
Spain -1.2% 1.4% 2.0% 1.8%
Russia 1.3% 0.6% -3.0% -1.0%
*IMF WEO Update, January 2015

As demand in Europe continues to fall, the outlook for weak economic growth this year and next will do little to support gas markets in the region. German GDP could grow by just 1.3% in 2015, while the UK’s economy is forecast to expand by 2.7%.