In the first quarter of 2022, European and Asian gas prices remained at stratospheric levels in the context of the energy and geopolitical crisis. Market conditions got relatively calmer in January and February as market fundamentals improved, especially due to warming weather. But since the end of February, the Russia-Ukraine conflict and its related concerns for the security of European energy supply triggered a stratospheric rise of European gas prices, which reached new record highs at the beginning of March. Since then, both European and Asian prices have slipped back but have remained extremely volatile in response to the evolution of the geopolitical context. European prices have most of the time retained a premium over Asia, attracting uncommitted cargoes from the Atlantic Basin, especially from the United States. Global LNG supply increased on the back of growing US LNG exports to Europe, while Asian LNG demand weakened amid a warming weather and a Covid revovery in China.
Laïla LOSSON - Page 8
Quarterly report – Q4 2021 – International natural gas prices
- European and Asian spot prices pursued their bull ride and exploded to new historic highs at year-end in a context of unprecedented supply tightness, geopolitical tensions and uncertainties related to the evolution of the pandemic.
- In Europe, gas prices skyrocketed to new stratospheric levels in a context of extreme tightness on the demand-supply balance which was fuelled by well below average gas inventories and a strong reduction of pipeline imports from Russia. In Asia, spot prices also jumped on the back of the hyper-volatility of European gas prices.
UNDERGROUND GAS STORAGE IN THE WORLD – 2021 STATUS
Including an analysis of the current global gas crisis – New report by CEDIGAZ
Underground gas storage is back in the spotlight with the current gas crisis, which once again illustrates its importance for security of supply, especially in Europe. The new 2021 Underground Gas Storage Report published by CEDIGAZ therefore includes an in-depth analysis of the underlying causes of the current crisis and highlights the crucial importance of storage to ensure the flexibility of the gas system. The report also provides an update of key global UGS statistics and regional dynamics at work with a focus on China and Russia.
Current gas crisis: Blame the weather and the market
European spot natural gas prices and Asian spot LNG prices reached all-time highs in October. The steep rise reflects a severe mismatch between gas supply and demand and was caused by a combination of several factors: a strong recovery in gas demand, notably in China, where coal shortages and environmental pressure reinforced the call on gas demand; unplanned LNG supply outages; extreme weather events that put immense pressure on the gas supply system, as well as on hydropower and wind generation; a sluggish recovery in gas production; and lower natural gas storage inventories in Europe.