IEA: Global gas markets will remain tight due to rising demand
Nina Chestney
LONDON (Jan. 21) - The global natural gas market will remain tight in 2019 as the demand for gas increases and production grows slower than it did before the energy crises of 2022 and 2020-2021. This was revealed by a report released on Tuesday by the International Energy Agency.
Why it's important
Political factors have exacerbated the volatility of gas prices, including the uncertainty surrounding the energy policy of U.S. president Donald Trump and possible disruptions of Middle Eastern supply.
The European Union has not yet experienced a shortage of gas due to the shutdown of Russian gas supplies via Ukraine, but the cold weather is expected to cause Europe to finish the winter with lower than average gas stocks. This will increase demand for LNG globally.
CONTEXT
In 2022-2023, gas demand in Europe fell, mainly because prices rose after Russia invaded Ukraine, and EU measures to curb consumption curtailed the use of Russian supply.
Global gas demand increased by 2.8% last year or 115 billion cubic meters (bcm) compared to the average growth rate of 2% between 2010 and 2020.
The IEA reported that the growth rate of liquefied gas (LNG), on the other hand, was lower than average.
Due to economic growth, the Asia-Pacific region will account for nearly 45% of additional gas demand by 2024.
By the Numbers
The growth of global gas demand this year is expected to drop below 2%. The report stated that Asia will continue to be the leading consumer and account for similar amounts of demand to last year.
Due to delays in projects and problems with feedgas supplies, global LNG supply increased by only 2.5% (or about 13 bcm), a lower rate than the 8% average between 2016 and 2020. In 2025, it is expected to increase by 5% or slightly more than 25 bcm as major LNG projects ramp up or start, mainly in North America.
KEY QUOTE
Gas market fundamentals improved in the last year, but we still see significant tightness because of rising demand and a muted growth of LNG capacity. Keisuke Sadamori, IEA Director of Energy Markets and Security said that geopolitical uncertainties have increased the risk. Nina Chestney, Barbara Lewis and Barbara Lewis edited this report.
(source: Reuters)
