Global gas markets are facing unprecedented volatility, with prices for Asian spot LNG rising from historic lows of below $2/mmBtu through the summer of 2020 to reach record highs of over $30/mmBtu by mid-January. Global gas markets experienced their largest recorded drop in 2020, with an estimated 2.5% year-over-year decrease in consumption (or about 100 bcm). The drop was triggered by the combination of an exceptionally mild winter followed by the spread of the COVID-19 pandemic. Progressive recovery was observed during the summer, after the lifting of lockdown measures, and supported by seasonal electricity demand and competitive gas prices. Colder December temperatures marked the start of a gas price rally amid tightening LNG supply. Asian spot LNG prices soared through mid-January 2021, breaking the record price levels that followed the Fukushima accident in 2011. This spike was not caused by a single event, but rather by a combination of typical supply and demand factors that resulted in a perfect market storm. These price spikes are not expected to last beyond the short-term cold wave, as market fundamentals for 2020 remain fragile. Global gas demand recovery in 2021 remains uncertain and subject to a number of risk factors including fuel switching, delayed industrial rebound and milder temperatures. This forecast expects global natural gas demand to grow 2.8% in 2021 (or about 110 bcm), which is a far cry from the 7.5% year-over-year post-2009 financial crisis rebound observed in 2010.
This webinar featured a presentation of the International Energy Agency’s (IEA) Quarterly Gas Report with Jean-Baptiste Dubreuil, senior natural gas analyst at the IEA, and Gergely Molnar, an energy analyst at the IEA. The presentation was followed by a Q&A moderated by Kenneth B. Medlock III, the James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics at the Baker Institute and the senior director of the Center for Energy Studies.
9:00 a.m. CST — Presentation
9:30 a.m. CST — Q&A
Senior Natural Gas Analyst, International Energy Agency
Energy Analyst - Natural Gas, International Energy Agency
Kenneth B. Medlock III, Ph.D.
James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics; Senior Director, Center for Energy Studies, Baker Institute