The International Energy Agency (IEA) warned on Tuesday that natural gas prices might rise in 2023. As Asia, notably China, resumes its demand for liquefied natural gas (LNG).
Natural gas prices have declined in recent months. While being high by historical standards, as a milder-than-expected winter maintained storage levels strong & increased supply in Europe.
China, the world’s biggest natural gas importer, experienced a decline in demand last year as a result of COVID limitations. The outcome was a 2% decrease in Asian consumption, which was exacerbated by the pleasant weather in north-east Asia.
However, the International Energy Agency (IEA) stated in a quarterly results on gas markets that if China’s economic activity picks up. After the ending of lockdowns, its domestically LNG consumption might surge by Ten percent in 2023.
China’s consumption might increase by as much as 35 percent if costs keep falling and the economy picks up speed.
China’s LNG demand is still a major concern for Europe since it could increase by 35% imports
As a result, the LNG market may become more competitive and prices might rise to those of previous summer. When gas prices for European consumers reached all-time highs.
“In 2023, China will be the great unknown. Intensifying competition on international markets & inevitable price increases would result if global LNG demand reaches pre-crisis levels “Director of Energy Markets & Security at the IEA, Keisuke Sadamori, stated.
Almost 1.6% less gas was consumed worldwide in 2017. In Europe, consumption declined by as much as 13% as high costs pushed some companies to reduce output & households to lower their heating.
In contrast, the amount of LNG delivered to Europe surged by 63% previous year. And also the value of worldwide LNG trade reached an all-time high of 450 billion dollar, according to the IEA.
As they looked for options to Russian pipeline gas, some European nations increased their investment in LNG infrastructure, according to the IEA report. But the spending was constrain by increasing cost of construction or a reluctance to sign new agreements because of the long-term uncertainty surrounding the use of fossil fuels.
In other places, it claimed that various pre-investment plans, including a few in Qatar & North America, had advanced towards a final decision.