Energy Central Professional

 

European natural gas prices to fall this year


Trend News Agency  

 

    BAKU, Azerbaijan, Jan.27

    By Leman Zeynalova – Trend:

    European natural gas prices are expected to fall this year on weaker demand growth and improved supply, Trend reports with reference to the UK-based Capital Economics research and consulting company.

    “Prices in Asia and the US should also fall, but from much lower levels and less steeply because those regions have higher stocks. And while LNG export capacity should grow in the US, there’s still not enough global capacity to eliminate regional price differences. Finally, we think coal prices in Asia and Europe will fall on weaker demand growth, greater supply, and lower shipping costs,” Capital Economics said in a report.

    The company notes that European natural gas prices have been given a fresh boost by building tensions between Russia and Ukraine.

    “This tension could ultimately lead to reduced Russian natural gas flows to Europe. But, for now, the uncertainty alone has boosted prices, especially given low stocks. Working against this upward pressure on European natural gas prices has been a surge in LNG imports into Europe. And exports from the US will continue to climb this year as new export facilities come online. Strong LNG supply to Asia last year helped support LNG stocks in the region, with inventories at Japanese power plants now 20 percent above seasonal norms for this time of year. This has contributed to a sharp fall in Asia LNG spot prices recently,” said Capital Economics.

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    Follow the author on Twitter: @Lyaman_Zeyn

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