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Cold Weather Threatens Energy Prices in Europe and Asia This Winter

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Energy markets in Europe and Asia are bracing for a challenging winter as forecasts predict a series of cold snaps that could significantly elevate power prices. Weather models indicate a high-pressure system developing over the North Atlantic and Arctic regions, which is expected to push polar air across much of Europe next week. This pattern is likely to recur throughout the heating season that commenced in October.

Alexey Miller, CEO of Russian gas giant Gazprom PJSC, recently warned of the potential for a severely cold winter in Europe and Russia, describing it as a rare event that could occur only once every 20 years. Analysts from Citigroup Inc. have noted that higher gas benchmarks in both Asia and Europe could see further increases if the winter proves to be particularly icy.

As energy demand surges due to the cold, competition for liquefied natural gas (LNG) supplies is anticipated to intensify. Europe and Asia will be vying for seaborne cargoes, exacerbating the existing tightness in the market. Currently, European gas stockpiles are approximately 83% full, but a recent cold spell in southeastern Europe has already prompted some countries to tap into their reserves.

Challenges in the LNG market are compounded by tanker shortages and logistical bottlenecks, as noted by Citigroup analysts. Additionally, demand from China may rise unexpectedly following a milder winter last year. While some forecasters predict a warmer-than-normal heating season, there is a growing consensus that frequent high-pressure waves will lead to sustained cold conditions in Europe.

Temperature Drops Expected Across Europe

Forecasts indicate that temperatures in central and southeastern Europe could briefly fall several degrees below normal next week. This could drive up heating demand in countries including France, Germany, Italy, and throughout eastern and southeastern Europe, according to data from Atmospheric G2 and Bloomberg models.

High-pressure systems may also limit the output of wind and solar energy, according to an analysis from weather analytics firm MetDesk. In the longer term, indications of a phenomenon known as sudden stratospheric warming suggest that Arctic air could sweep across Europe in January and February. MetDesk meteorologist Matt Dobson explained that such events increase the likelihood of cold spells in the following weeks. For example, in January 2018, sudden stratospheric warming contributed to a severe winter storm in the UK, known as the “beast from the east,” which saw temperatures plummet to as low as -12°C (10°F), disrupting energy supplies.

Asia Faces Its Own Winter Challenges

Asian countries are also preparing for potential winter weather risks. In Japan, the Japan Meteorological Agency has highlighted the likelihood of early-season cold snaps due to various atmospheric and oceanic factors, including La Niña conditions. These conditions, which emerged last month, are expected to remain in effect until February, typically leading to cooler weather and enhanced cold-air outbreaks from the north.

The Japanese forecaster anticipates a return to more typical conditions later in the winter, although there is a 40% chance that the northern Tohoku and Hokkaido regions will experience above-normal winter temperatures.

Meanwhile, forecasts from Maria Madsen of the US-based firm Salient Predictions suggest that India and parts of Southeast Asia will likely see below-normal temperatures from November through February. In contrast, regions such as Bangladesh, Nepal, and Central Asia are expected to experience warmer-than-usual conditions.

As the winter progresses, both Europe and Asia will need to navigate the challenges of fluctuating energy demand and supply, making this season a critical test of their energy resilience.

Our Editorial team doesn’t just report the news—we live it. Backed by years of frontline experience, we hunt down the facts, verify them to the letter, and deliver the stories that shape our world. Fueled by integrity and a keen eye for nuance, we tackle politics, culture, and technology with incisive analysis. When the headlines change by the minute, you can count on us to cut through the noise and serve you clarity on a silver platter.

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