Highlights

  • Demand from the six biggest markets is expected to rise on an annual basis during the first four months of 2015
  • European production is continuing to fall year on year
  • Storage levels are lower than last year in the largest European markets
  • Mild temperatures at the end of winter will constrain hub price gains

Economic overview

The possibility of Greece exiting the eurozone is continuing to create uncertainty in Europe.  

Greece’s future as part of the eurozone has been in question since its change of leadership in January. If Greece does exit the euro – something that would be unprecedented and almost certainly create wider issues for the remaining countries – the currency union will need time to regroup. Negotiations for refinancing Greece’s debts are ongoing and the country has just months to reach a deal under the current conditions of its bail-out extension.

European GDP forecast

  2014 2015 2016
Germany 1.5% 1.5% 2.0%
Spain 1.4% 2.3% 2.5%
Italy -0.5% 0.6% 1.3%
France 0.4% 1.0% 1.8%
Netherlands 0.7% 1.4% 1.7%
UK 2.6% 2.6% 2.4%
Source: European Commission

The economic challenges facing the eurozone are likely to limit the upside in the potential for gas market expansion for much of the region this year.

The UK is facing a general election in May and if the Conservative party win, there will be a referendum on whether the country should stay in the EU. The possibility of the UK leaving the EU is unnerving investors and the uncertainty surrounding a potential exit will present challenges for the economy. While the country is still expected to see economic growth in 2015, it could be pressured by the outcome of the election. This will do little to support growth in the country’s gas market this year.