Low Global Gas Prices This Decade Amid Oversupply: IEEFA

Global gas prices are set to remain low for the rest of the decade amid an oversupply of LNG, said an analyst with the Institute for Energy Economics and Financial Analysis (IEEFA) cited by Montel.

• Prices well below $10/mmbtu are likely with a record increase of liquefaction capacity in 2026 and supplies from the US and Qatar to nearly double by 2030.
• European gas demand is forecast flat at 170bcm/year until 2025 but should reduce to approximately 130bcm by 2030 as efforts continue to phase out imports of Russian gas by 2027.
• Japanese utilities are increasing LNG reselling with a surplus of 11m tonnes/year (15bcm/year) of contracted LNG supply expected. Demand is under pressure from rising nuclear and renewables power capacity, long-term climate targets and demographic shifts.
• “As Europe and Japan reduce demand, suppliers and marketers will be competing for market share in a demand pool that appears to be drying up,” said Sam Reynolds at IEEFA.
• “We do see a very slight uptick in LNG demand in the near term, encouraged by lower prices, but in the longer term we see overall gas demand reductions and efforts to diversify energy sources ultimately weighing on LNG demand.”