Europe | Gas still keeps EU on edge

Summary

Recent fluctuations in gas prices have had a considerable impact on both activity and inflation. Going forward, we see supply factors that can moderate these tensions.

Key points

• Key points:
• The relevance of gas in the determination of electricity prices is key because it is a stable supply that does not depend on weather conditions.
• Current reserves are below historical levels due to colder temperatures, among other factors.
• Independence from Russian fuel has made Europe more dependent on the price fluctuations of liquefied natural gas (LNG), which is more expensive and more volatile.
• In the medium term, we expect that supply will improve, although geopolitics will continue to play a significant role in price evolution.

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