FT Summit: Vitol, Trafigura views split over European gas market

23 Nov 2022

Quantum Commodity Intelligence - European industry faces another "absolutely awful" summer in 2023 as persistently high gas prices will lengthen or renew industrial production shutdowns, Russell Hardy, chief executive of Vitol, said Wednesday.

Speaking at the Financial Times Commodities Asia Summit in Singapore, Hardy said that gas prices would have to stay sufficiently high to suppress demand for the fuel over next summer from industrial users such as fertiliser plants and gas-fired power plants to refill storage and keep the lights on.

"There's still this massive gap [of Russian gas] next year to fill. High prices will have to compress demand largely every month of next summer. It's not a good thing — it's an absolutely awful thing for European businesses, and that's the genesis of the recession," reported the FT.

However, this view was contrasted by trading house rival Jeremy Weir, chief of Trafigura.  

Weir told the conference that mild weather across Europe in recent weeks was helping the region to avoid a natural gas shortage for both this winter and next.

He said Europe's gas inventories are likely to decrease by approximately two-thirds this winter, on the provision of an average winter with regards to weather and Russian flows continuing through Ukraine, allowing the region to build a buffer for the following winter.