After falling close to 20% under the lockdowns, European gas demand is showing first signs of recovery in June, with a flat yoy growth just above 0%.
This has been primarily driven by the power sector. despite electricity consumption falling by close to 10%, gas-fired power-generation was on the rise, at the expense of coal and lignite and capturing some market share left by plummeting French nuclear (down by ~25%).
This has been particularly spectacular in Germany, where gas-fired power-generation jumped by an impressive 77% and was even outcompeting lignite in the first half of June. Lower solar and wind output was also a factor.
What is your view? Are we seeing the start of the recovery for European gas? Most of the coal-to-gas switching potential has been exhausted, but could be more lignite being beaten out by the record low gas prices?
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