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.

Quarterly report – Q3 2021 – International natural gas prices

  • In a context of an unprecedented tightness on the global gas market, European and Asian spot prices continued their dizzying ascent in the third quarter of 2021. The historic surge became more pronounced as the year progressed and the market tightened.  
  • In Europe, low gas inventories, reduction of both regional production and pipeline imports (from Russia and Norway) as well as record-high carbon prices have propelled the TTF price, which provided a price floor for north-east Asian LNG. 
  • In September, international spot prices went stratospheric, spurred by fresh European concerns over Russia’s ability to increase pipeline exports and continued competition for spare LNG cargoes from Asia and South America. 
  • Spot prices also spiked in Asia. The Asian bull run was mainly driven by gains on the Dutch TTF hub. At the regional level, LNG demand outpaced LNG supply, which underperformed due to a series of unexpected outages.