Even as Europe faces a devastatingly cold winter as natural gas inventories are well below seasonal averages and unelected bureaucrats still refuse to accept the reality that Putin's Nord Stream 2 pipeline will be the savior for the continent's energy crisis, there's a sign of relief as new weather models forecast mild temperatures for the next few weeks.
According to Vontobel Asset Management AG, mild weather from now through the first half of November could prevent additional strain on natgas inventories on the continent, already below seasonal trends. This could allow inventories to build while the demand for gas subsides.
"The main driver that will decide if storage levels will be depleted by during or even before peak winter season, and if there will be further price spikes, is the weather," Michel Salden, head of commodities at Vontobel said.
Heating degree days, a meteorological tool used to gauge the demand for energy to heat a building structure will see a drop below the 30-year norm next week into early November. This is a good sign and suggests less energy will be used and may temporarily alleviate the energy crunch for a week or two.
Above-average temperatures will be seen across Germany for the first half of November, according to national forecaster Deutscher Wetterdienst.
While temporary relief is ahead, it will only last a few weeks. More importantly, Europe's unelected bureaucrats will need to figure out regulatory approval to start shipments through the Nord Stream 2 pipeline. The current energy crisis could worsen after the mild weather dissipates.