February 28, 2023 (MLN): The global natural gas markets are expected to remain tight in 2023 amid uncertainty surrounding China's LNG demand and the possibility of further gas supply cuts by Russia, which would exacerbate the situation, the latest report by the International Energy Agency (IEA) revealed today.

Despite a predicted drop in gas consumption of 1.6% in 2022, natural gas markets worldwide continue to tighten. The IEA noted that natural gas demand in Europe contracted by 13% last year, its steepest drop in recorded history.

 This was due to unprecedented price increases, which led to emergency policies being instigated to combat the energy crisis. Lower supplies, diminished industrial production, and lower consumer demand, along with milder winter weather conditions, also contributed to the drop in gas demand.

Asia's natural gas demand also fell by 2% last year, again due to high LNG prices. The IEA report states that "China's gas consumption decreased by 1% in 2022 as a result of lower growth in economic and especially industrial activity, COVID-related restrictions, and high prices."

The tightening of global natural gas markets has already had an impact on prices. In Europe, prices for natural gas have skyrocketed, hitting record highs in recent months. The situation has put pressure on governments and energy companies to find solutions to mitigate the impact of rising prices on consumers and businesses.

The IEA report highlights the need for investment in the natural gas industry, both in terms of supply and demand. This includes the need for more investment in infrastructure to improve the flexibility of supply and ensure that it can meet demand.

Overall, the report suggested that the natural gas industry will face ongoing challenges in the coming year, with uncertainty surrounding China's LNG demand and the potential for further gas supply cuts by Russia.

Nonetheless, the report also noted that there is an opportunity for the industry to invest in infrastructure and improve the flexibility of supply, which could help to alleviate some of the current pressures on the market.

Copyright Mettis Link News

Posted on: 2023-02-28T13:13:13+05:00