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First Estimates - May 2020 - 62 pages – PDF, XLSX format

The demand for natural gas continued to display sustained growth in 2019 (+2.3%), to the detriment of coal. This growth is lower compared to the two previous years but in line with the historic 10-year average.

The main factor was the competitiveness of gas in a context of oversupply which encouraged switching from coal in the power  and industry sectors, chiefl y in the United States and the EU.

As a result, the share of gas in the energy mix continued to rise. Today, this share is estimated to be 23%, compared to 21% in 2010. Recent developments suggest that the power market has embraced the energy transition through a growing role of natural gas and renewables.

The US remained the largest contributor to both supply and demand growth thanks to the abundance of low-cost shale and  associated gas resources. US gas production continued to increase in 2019 at a much faster rate than consumption, thereby creating a large surplus destined for exports.

China was the second largest demand growth area again, even if the expansion of gas demand slowed to 8.6% in a context of weaker economic growth and the relaxation of Chinese policy on coal-to-gas switching.

International trade (net fl ows) expanded strongly by almost 4% only due to the growing abundance of highly competitive LNG supply which displaced pipeline gas, especially in Europe. LNG demand growth slowed in Asia, while Europe absorbed much of the surplus LNG, acting as a balancing market.

As global natural gas supply growth largely outpaced demand growth, a significant amount of natural gas was injected into storages. In a context of LNG overhang, spot prices on the Asian and European markets plunged by more than 40% compared to 2018. New pricing and trading patterns reshape the global gas market which increasingly relies on spot-priced and fl exible gas supply.