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.
- 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.
- 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.