1 December 2022 | Macroeconomics

Winter cold coming to Europe will challenge energy systems

After a warm November, temperatures will drop this month across Europe, and increased pressure on natural gas supplies will test the region's fragile energy networks.

Long-term forecasts from Maxar Technologies Inc. and Marex show an increased likelihood of colder temperatures across much of the continent. At least for the first half of the month, cold Arctic wind gusts are expected due to a weather pattern known as blocking.

Matthew Dross, a meteorologist at Maxar, said that because of the colder weather in early December, demand in central and northern Europe will increase, and if Arctic blocking persists, demand could remain during the second half of the month. The big question now is how long this cold blocking will last.

Thanks to a warmer-than-normal fall, utilities have been able to replenish their gas supplies, and they will have to be emptied at the first prolonged cold spell. European gas contracts now cost four times as much as usual at this time of year. As a result, industry and households face enormous costs.

Anna Borisova MarketCheese
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