IEA: Outlook bleak for EU gas sector

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PARIS, May 7 (UPI) -- There's not much to suggest the European natural gas market will make dramatic gains any time soon, the International Energy Agency said.

The IEA said in its monthly journal that European countries consumed 8 percent more natural gas in 2010, erasing the 6 percent decline that coincided with economic crises in 2009.

That agency, however, said that was "an illusion" because of colder winters. When adjusted seasonally, the IEA said gas consumption in some countries is at 10-year lows.

For the residential and commercial sector, the agency said modest population growth and energy-efficiency gains mean "the backbone of European gas consumption" is unlikely to post and significant gains.

"Unless the European climate gets much colder ... there is little hope for major gains in this sector," the agency said.

For the industrial sector, manufacturing and production levels are less than 2007 levels for most European countries. They're importing more coal as lower gas prices in the United States mean exports are cheap.

"Only an improved economic outlook or much lower gas prices would trigger a recovery in this sector and both look relatively unlikely in the medium term," the agency said.