The Northern Hemisphere experienced its warmest winter on record, with unusual warmth centered around the Atlantic Basin, leading to a huge glut of gas and a drop in gas prices since October. This is reported by Reuters.
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According to data collected by the US National Oceanic and Atmospheric Administration (NOAA), land surface temperatures were +2.65 degrees higher average value of the 20th century in the period from December to February.
Record temperature in winter 2023/24. beat previous highs of +2.44 degrees in 2019/2020. and +2.61 degrees in 2015/16. — also winters characterized by excess supplies and falling gas prices.
Global warming, the El Niño climate phenomenon, a strong positive North Atlantic Oscillation and the solar cycle moving toward its 11-year peak have all contributed to the extreme warmth this winter.
North America
Europe received the most attention due to the disruption to the regional gas market following Russia's full-scale invasion of Ukraine, but North America experienced the most extreme weather.
Temperatures in North America were +3.43 degrees above the long-term average between December and February.
North America experienced record heat anomalies in both December (+4.66 degrees) and February (+3.59 degrees), which led to reduced demand for heating with both gas and gas electricity.
U.S. gas inventories began the heating season just 64 billion cubic feet (1.8 billion cubic meters) above the previous 10-year seasonal average on Oct. 1.
At the end of November, inventories were still just 129 billion cubic meters. ft. above the 10-year seasonal average.
But by the end of December, the glut had risen to 307 billion cubic feet after unseasonably warm weather.
Futures prices in the United States for the next month in October averaged about $3.19 per million British thermal units (about $90 per thousand cubic meters).
By February, average inflation-adjusted prices had fallen to a record low. at $1.80 per million British thermal units (about $50 per thousand cubic meters).
Europe
Europe also had a very warm winter with temperatures 2.73 degrees above the long-term average , making the winter the second warmest on record after the 2019/20 season (+3.32 degrees).
The strongly positive North Atlantic Oscillation sent strong westerly winds into Northwestern Europe, bringing a lot of warm and moist air from the Atlantic.
The temperature anomaly may not have been as extreme as in North America, but combined with prices significantly higher than the average before Russia's invasion of Ukraine, this was enough to leave the region with record seasonal reserves by the end of February.
In October, European futures for the next month averaged almost 46 euros per megawatt-hour, but in February fell to an average of 26 euros ($290 per thousand cubic meters).
Gas consumption and falling prices
North America, Europe and Asia combined accounted for about two-thirds of global gas consumption in 2022. North America and Europe alone accounted for 40% of global consumption, with a large share occurring in the winter months due to heating demand.
Thus, the exceptional warming around the Atlantic Basin in the winter of 2023/24 occurred in precisely the area that had the greatest impact on gas consumption, supplies and prices.
When historians wonder why Russia's full-scale invasion of Ukraine and The retaliatory sanctions imposed did not lead to shortages and a more severe and lasting price hike; they most likely refer to the extremely warm winters in both 2022/23 and 2023/24. years, and not political actions as the main reason.
In the winter of 2023/24, European gas consumers were very lucky and saw prices normalize. Conversely, North American producers find themselves in a deep slump as they struggle to sell in a market flooded with too much gas.
Next winter, however, is likely to be colder in North America and Europe.
Meanwhile, lower prices will lead to slower or no production growth in the United States, which should lead to a gradual strengthening of the market over the next 12 months.
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