Spanish gas demand drops early April as virus restriction measures bite

Natural gas demand in Spain fell sharply in early April, data from S&P Global Platts Analytics showed Wednesday, reflecting restriction measures poised to help curb the coronavirus spread.

Conventional Spanish gas demand had averaged 61.5 million cu m/d so far in the month, dropping more than 22% compared to the same period last year. Demand declined 15% if compared with the whole month of April 2019.

Similarly, gas-for-power demand fell 16% on the year to 16.5 million cu m/d, the data showed.

While coronavirus-related deaths are still rising in the country, the pace of the proportional daily increase appeared to be slowing down slightly, according to the Spanish health ministry. The government plans to gradually relax the country's strict lockdown measures, with some industrial demand expected to return April 13 while other non-essential businesses remain closed.

"At least industrial demand will be back on the second half [of the month], although without demand [pre-lockdown] a lot of industry won't be able to return, like...automobiles," a Spanish power trader said.

A Spanish gas trader said: "We are in total lockdown mode till April 13...so there will be more demand than today. That is a fact. From there...it will depend on consumption."

"The demand shows some signs of weakening however at a lesser extent than other European countries," Platts Analytics Konstantinos Pantazopoulos said. "Currently conventional demand -- LDC/Industrial -- is about 15% below where it should have been, showing that industrial demand has been affected by the coronavirus outbreak. However, colder temperatures last week kept the figure supported. CCGT is also affected but some of the decline is offset by lower wind generation."

Wind power output during the first days of April was 24% lower on the year, according to data from Spanish grid operator Red Electrica de Espana, while other power generation like hydro had also decreased in line with lower demand. Daily power demand in the latest week peaked between 27 GW and just under 30 GW, down from a steady daily peak of around 31 GW the previous week.