Colder-than-normal weather settling into Europe over the next week is poised give the second boost to natural gas and power markets since the start of the heating season. The chill is raising hopes that after record warmth in 2019 this winter reverts closer to the 30-year average. Energy prices are rising on the expectation that coronavirus restrictions may boost energy demand for heating.
The weather will also test a theory new to the market this year, that power and gas demand will rise more quickly in cold weather in than in previous years. The reasoning is that those stuck working at home will dial up heat that would otherwise switched down during their hours in the office.
Temperatures to dip below normal in December in north west Europe
Sourec: Weather Co.
“Widespread seasonal and below-normal temperatures will result in overall energy demand running well above the 10-year normal,” Matthew Dross, a meteorologist at Maxar said in a report. The north and west of Europe will continue to be cold throughout December, he said.