The International Energy Agency (IEA) published on Friday its Gas Market Report for the first quarter of 2024. The document provides a review of the global gas market developments in 2023 as well as a short-term outlook for 2024.

According to the document, the consumption of natural gas in Europe in 2023 “fell by 7%, reaching its lowest level since 1995.” The same number was advanced by consultancy Wood Mackenzie in a report released last week.

The gas demand reduction was driven by the rapid expansion of renewables and increased nuclear generation and came mainly from the power sector which accounted for 75% of the decline.

Meanwhile, gas consumption in the industry sector “started to recover in the second half of 2023, albeit remaining well below its 2021 level,” states the report. A 6% decline was recorded in the first half of 2023 but was “more than offset by the increase in the second half”.

Reduced demand drove prices lower last year. TTF front month declined by around 70% compared to 2022. However, it remained “two and a half times higher than their five-year average during 2016-2020.”

According to the IEA, gas demand in Europe is expected to remain relatively weak in 2024 as it is forecast to grow by 3% driven by the recovery of gas use in the industry and space heating, while gas use in the power sector is expected to decline even further.