Germany, Italy and the Netherlands all reported sharp reductions in gas consumption in June and July compared with the pre-invasion average. Most energy-intensive industrial users require uninterrupted supplies, buy gas on contracts linked to longer-term averages, and hedge their costs forward to lock in profit margins. Prices for gas to be delivered throughout 2024 are still double the inflation-adjusted average for the five years between 2017 and 2021. But the region has paid a high price in terms of reduced manufacturing activity, which could lead to permanent deindustrialisation unless gas prices are reduced significantly within the next couple of years. Related columns:- Europe’s gas storage must peak early this autumn (September 8, 2023)- High prices keep lid on Europe's industrial gas use (July 11, 2023)- Europe’s gas storage space is filling too fast (July 6, 2023)John Kemp is a Reuters market analyst.

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Persons: Fabian Bimmer, TJ, John Kemp, David Evans Organizations: REUTERS, Eurostat, TJ, Energy, Thomson, Reuters Locations: Netherlands, Germany, Embsen, Ukraine, Italy, Europe, Australia