Europe’s Gas-Guzzling Days Are Fading
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Europe’s Gas-Guzzling Days Are Fading

In a reality check for natural-gas producers, volatile prices are prompting European homes and factories to go green faster than expected

Tue, Aug 22, 2023 8:33amGrey Clock 3 min

Last year’s hottest gas market has cooled, and some of the change will stick.

Demand for natural gas in Europe hasn’t bounced back despite lower prices. The region’s TTF benchmark price is down 85% compared with a year ago, when Europe was rushing to fill its gas-storage facilities for winter after Russia cut off supply.

Prices have fallen partly because Europe’s gas storage is already full. It hit a 90% capacity target last week, more than two months ahead of a schedule set last year by the European Union.

But underlying demand is also weak. According to think tank Bruegel’s European natural gas demand tracker, use of gas in the first quarter of this year was 18% lower than the 2019-2021 average, and 19% below in the second quarter. The declines have accelerated from the 12% fall recorded last year.

Weaker economic growth is one reason why gas use hasn’t recovered. Another may be that lower wholesale prices haven’t been passed on to end users yet, according to Ben McWilliams, author of the Bruegel tracker.

Other factors will be more permanent, notably new technologies. The European Heat Pump Association said sales of heat pumps rose 39% in 2022. They are now installed in 16% of Europe’s residential and commercial buildings, often replacing gas boilers. Heat pumps require electricity, which is often produced using gas, but this too is changing. Installations of new solar capacity rose a record 47% in 2022, and last year was the first time that renewable power generated more of Europe’s electricity than natural gas.

One uncertainty for future gas demand is whether European industries such as chemicals and fertiliser manufacturing will return to normal. The International Energy Agency thinks that up to half of the decline in Europe’s industrial gas demand last year was a result of production shutdowns. Certain companies whose business model traditionally relied on cheap Russian gas moved manufacturing to lower-cost regions such as the U.S., where gas costs roughly a quarter of the European spot price.

European gas prices will be volatile until more global liquefied natural gas supply arrives in 2025. The TTF jumped 5% on Monday because of worries about strikes at an Australian LNG terminal. Companies may be reluctant to restart their European factories until the region’s energy costs are more predictable.

Before the Ukraine war, global demand for natural gas was expected to increase 18% between 2021 and 2030, according to estimates from the Oxford Institute for Energy Studies. This forecast has since been cut to 10%. Lower growth expectations reflect the sharp cutbacks in Europe as well as the U.S. Inflation Reduction Act, which will supercharge America’s shift to renewable energy.

None of this is ideal for the U.S. LNG players who are currently pouring billions of dollars into new production. Based on projects that have already secured funding, and those in the pipeline, U.S. LNG export capacity could double by the end of this decade, according to Wood Mackenzie estimates.

True, Europe needs plenty of LNG over the next few years to replace the shortfall left by Russian pipeline gas. But the faster the region weans itself off gas, the sooner exporters will need to find a new home for at least some of their cargoes.

The expectation is that countries still using a lot of coal in power generation, such as India and Pakistan, will eventually switch to natural gas to cut their carbon emissions—assuming prices come down enough to make that transition affordable. “The window of opportunity for natural gas is tightening all around the world, although coal-reliant markets in Asia provide growth prospects over the medium-term,” says Gergely Molnar, energy analyst at IEA.

Buyers and sellers of natural gas took very different lessons from last year’s record prices, and the fuel’s reputation as a cheap, reliable form of energy took a hit. The pace of change in Europe’s gas market raises the risk of a glut.


This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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Luxury watch collectors showed ongoing strong demand for Patek Philippe, growing interest in modern watches and a preference for larger case sizes and leather straps at the June watch sales in New York, according to an analysis of the major auctions.

Independent and neo-vintage categories, meanwhile, experienced declines in total sales and average prices, said the report from  EveryWatch, a global online platform for watch information. Overall, the New York auctions achieved total sales of US$52.27 million, a 9.87% increase from the previous year, on the sale of 470 lots, reflecting a 37% increase in volume. Unsold rates ticked down a few points to 5.31%, according to the platform’s analysis.

EveryWatch gathered data from official auction results for sales held in New York from June 5 to 10 at Christie’s, Phillips, and Sotheby’s. Limited to watch sales exclusively, each auction’s data was reviewed and compiled for several categories, including total lots, sales and sold rates, highest prices achieved, performance against estimates, sales trends in case materials and sizes as well as dial colors, and more. The resulting analysis provides a detailed overview of market trends and performance.

The Charles Frodsham Pocket watch sold at Phillips for $433,400.

“We still see a strong thirst for rare, interesting, and exceptional watches, modern and vintage alike, despite a little slow down in the market overall,” says Paul Altieri, founder and CEO of the California-based pre-owned online watch dealer, in an email. “The results show that there is still a lot of money floating around out there in the economy looking for quality assets.”

Patek Philippe came out on top with more than US$17.68 million on the sale of 122 lots. It also claimed the top lot: Sylvester Stallone’s Patek Philippe GrandMaster Chime 6300G-010, still in the sealed factory packaging, which sold at Sotheby’s for US$5.4 million, much to the dismay of the brand’s president, Thierry Stern . The London-based industry news website WatchPro estimates the flip made the actor as much as US$2 million in just a few years.

At Christie’s, the top lot was a Richard Mille Limited Edition RM56-02 AO Tourbillon Sapphire
Richard Mille

“As we have seen before and again in the recent Sotheby’s sale, provenance can really drive prices higher than market value with regards to the Sylvester Stallone Panerai watches and his standard Patek Philippe Nautilus 5711/1a offered,” Altieri says.

Patek Philippe claimed half of the top 10 lots, while Rolex and Richard Mille claimed two each, and Philippe Dufour claimed the No. 3 slot with a 1999 Duality, which sold at Phillips for about US$2.1 million.

“In-line with EveryWatch’s observation of the market’s strong preference for strap watches, the top lot of our auction was a Philippe Dufour Duality,” says Paul Boutros, Phillips’ deputy chairman and head of watches, Americas, in an email. “The only known example with two dials and hand sets, and presented on a leather strap, it achieved a result of over US$2 million—well above its high estimate of US$1.6 million.”

In all, four watches surpassed the US$1 million mark, down from seven in 2023. At Christie’s, the top lot was a Richard Mille Limited Edition RM56-02 AO Tourbillon Sapphire, the most expensive watch sold at Christie’s in New York. That sale also saw a Richard Mille Limited Edition RM52-01 CA-FQ Tourbillon Skull Model go for US$1.26 million to an online buyer.

Rolex expert Altieri was surprised one of the brand’s timepieces did not crack the US$1 million threshold but notes that a rare Rolex Daytona 6239 in yellow gold with a “Paul Newman John Player Special” dial came close at US$952,500 in the Phillips sale.

The Crown did rank second in terms of brand clout, achieving sales of US$8.95 million with 110 lots. However, both Patek Philippe and Rolex experienced a sales decline by 8.55% and 2.46%, respectively. The independent brand Richard Mille, with US$6.71 million in sales, marked a 912% increase from the previous year with 15 lots, up from 5 lots in 2023.

The results underscored recent reports of prices falling on the secondary market for specific coveted models from Rolex, Patek Philippe, and Audemars Piguet. The summary points out that five top models produced high sales but with a fall in average prices.

The Rolex Daytona topped the list with 42 appearances, averaging US$132,053, a 41% average price decrease. Patek Philippe’s Nautilus, with two of the top five watches, made 26 appearances with an average price of US$111,198, a 26% average price decrease. Patek Philippe’s Perpetual Calendar followed with 23 appearances and a US$231,877 average price, signifying a fall of 43%, and Audemars Piguet’s Royal Oak had 22 appearances and an average price of US$105,673, a 10% decrease. The Rolex Day Date is the only watch in the top five that tracks an increase in average price, which at US$72,459 clocked a 92% increase over last year.

In terms of categories, modern watches (2005 and newer) led the market with US$30 million in total sales from 226 lots, representing a 53.54% increase in sales and a 3.78% increase in average sales price over 2023. Vintage watches (pre-1985) logged a modest 6.22% increase in total sales and an 89.89% increase in total lots to 169.

However, the average price was down across vintage, independent, and neo-vintage (1990-2005) watches. Independent brands saw sales fall 24.10% to US$8.47 million and average prices falling 42.17%, while neo-vintage watches experienced the largest decline in sales and lots, with total sales falling 44.7% to US$8.25 million, and average sales price falling 35.73% to US$111,000.


This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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