​The energy crisis in Europe, associated with the end of the pandemic and Russia’s invasion of Ukraine, has ended. Markets have adjusted, Reuters analysis shows. The problem that remains is that Europe has replaced relatively cheap Russian gas with more expensive liquefied natural gas, which has jeopardized the competitiveness of the industry, but this is a chronic problem, not a crisis.

Crude oil and gas inventories are above the seasonal average of the last ten years

On the oil market, crude oil production in the US increased and exceeded the pre-pandemic peak. And other sources are growing. Commercial crude inventories in mid-November were 12 million barrels above their seasonal average over the past decade, suggesting the market is comfortably supplied.

In Europe, gas storage volumes have reached record levels, especially after a sharp decline in industrial gas consumption.

Gas consumption is reduced

Total gas consumption in high-consumption EU countries (Germany, Italy, France, Netherlands, Spain, Belgium and Poland) fell by 13% in the first nine months of 2023 compared to the seasonal average of the last ten years before the US invasion . Ukraine.

Inflation-adjusted futures prices for next year averaged €48/MWh, compared with €223 in August 2022.

They are still high compared to €23/MWh, which was the average in 2015-2019.

Although prices are still high, they are no longer at pre-crisis levels and are likely to fall further through 2024.

A sharper drop occurred in coal, demand fell sharply in connection with the increase in gas reserves.

Coal prices for delivery to NW Europe averaged just $112 per tonne in November 2023, compared to a record high of $300 per tonne in September 2022.

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