Blame it on the weather
Jan 18, 2023
Looking at the European gas storage levels from the moon, you would not guess there is a war in Ukraine triggering a severe energy crisis in Europe. Now we have a beneficial combination of a lower than expected supply shock and less demand for heating due a mild winter. The result: Gas storage levels in the EU are above 85% and therefore in the high range of what we have historically seen in January. Gas prices, according to widely used benchmark indices, are down some 85% since last August. Economically this results in lower production costs, less headline inflation and ultimately less pressure on the ECB to hike interest rates. Blame the good news in Europe on the weather.