“Despite the rebalancing in 2023, the volatility of the gas market remains high”, says the insurer in an analysis note.
Gas prices are expected to remain high until next year. The analysis is carried out by Crédito y Caución, which warns of the high volatility of the gas market, “despite the rebalancing of 2023”.
In an analysis note, the insurer explains that “gas prices will remain high until the middle of this decade as global gas markets continue to adjust to the loss of Russian gas pipeline supplies to Europe.” “This will have an impact on prices in other importing regions, although the effects in Asia will be mitigated by the indexation of many long-term contracts to oil prices. After 2025, improving liquefied natural gas transportation capacity will reshape the gas market, reducing prices in key regions,” she adds.
According to Crédito y Caución, considering “a baseline scenario that takes into account only the commitments already announced, global gas demand will fall by 7% in 2030 and 42% in 2050, compared to current levels. Forecasts for Europe in this baseline scenario point to a 28% reduction by 2030. In a scenario of net zero emissions by 2050, the global decline would reach 78% in 2050.”
“The gas market progressively rebalanced in 2023, after a year of strong tensions resulting from Russia’s invasion of Ukraine. In December 2023, gas prices recorded year-on-year falls of 68% in the United States, 54% in Europe and 39% in Asia. Despite this global decline, gas market volatility remains high and prices remain well above their historical averages, both in Asia and Europe”, analyzes
According to Crédito y Caución, “the share of gas in the energy mix will decrease as renewable energies gain market share, but less than that of oil”.
As for markets, China, India and the Middle East will continue to be the main sources of demand growth in the coming decades. On the other hand, the European, Japanese and American markets will experience a “contraction in demand”. The USA is currently the world’s largest supplier of natural gas, followed by Russia and Iran. “In the baseline scenario, Russia is expected to be the largest supplier by 2050, followed by the USA and Qatar”, adds the same note .
