The price of gas declined almost constantly over the year, affected by three main factors: the level of stocks, mild temperatures, and arrivals of LNG in Europe.
The massive influx of LNG into Europe particularly resulted from the boom in North American production, and a preference for the European rather the Asian market to sell some of the LNG produced, given the geographical proximity to the North-East American coast and the price levels in the two zones. Meanwhile, European demand remained moderate as the late winter was milder than the previous year. Stock levels rose, reaching saturation point in October, and stayed at record levels throughout the final quarter (95% during the quarter on average, compared to 86% in 2018).
Natural gas and oil prices
In January 2018: The natural gas – Gas year ahead PEG Nord contract is approximately 18 €/MWhg (Powernext). The Brent price is approximately 67 $/bbl (ICE).
In October 2018, upon the change of gas year: The natural gas – Gas year ahead PEG Nord contract is approximately 27 €/MWhg (Powernext). The Brent price is approximately 82 $/bbl (ICE).
In October 2019, upon the change of gas year: The natural gas – Gas year ahead PEG Nord contract is approximately 17 €/MWhg (Powernext). The Brent price is approximately 64 $/bbl (ICE).
In December 2019 : The natural gas – Gas year ahead PEG Nord contract is approximately 18 €/MWhg (Powernext). The Brent price is approximately 63 $/bbl (ICE).
-Bent prices in US$/bbl(ICE)
- Natural gas - Gas ahead PEG Nord contract in €/MWhg (Powernext)
5.1.2.2 Electricity and gas consumption
5.1.2.2.1 Electricity and gas consumption in France
Electricity consumption in France (1) reached 473.7TWh in 2019, down from 2018 (-1.0%). Only the second quarter of 2019 showed a year-on-year increase (+3.0%). After correction for weather effects, electricity consumption in France was slightly lower than in 2018 (-0.5%).
Natural gas consumption in France (2) increased by +1.9% between 2018 and 2019 to 479.0TWh. In January 2019, lower year-on-year temperatures drove demand for heating up. Consumption rose overall in 2019 due to higher use of gas-fired plants for electricity generation throughout the year (+7.9TWh).
5.1.2.2.2 Electricity and gas consumption in Italy
Electricity consumption in Italy (3) in 2019 totalled 319.6TWh, down slightly (-0.6%) from 2018. The lower level of hydropower output, principally resulting from unfavourable weather conditions in the first half of 2019, was offset by an increase in thermoelectric, wind power and solar power generation. Net imports were down by 13.1%.
Domestic demand for natural gas in Italy (4) increased by 2.2% after the rise in gas-fired thermal generation. The milder temperatures of the first quarter of 2019 resulted in a 1.9% downturn in consumption on the residential market. Industrial consumption decreased by 1.9%.
(1) Sources for France: unadjusted data and data adjusted for weather effects provided by RTE (data for December 2019 are estimates as final figures are not yet available).
(2) Sources
for France: unadjusted data provided by Smart GRTgaz.
(3) Sources for Italy: unadjusted data and data provided by Terna, the Italian national grid operator, and adjusted by Edison.
(4) Sources for Italy: Ministry for Economic Development (MSE), Snam Rete Gas data adjusted by Edison on the basis of 1Bcm = 10.76TWh.