IEA | Quarterly Gas Report

As noted in IEA’s quarterly gas report, global gas markets face unprecedented volatility, with Asian spot LNG prices rising from historical lows of below USD 2/MBtu through the summer 2020 to reach record highs of over USD 30/MBtu by mid-January.

Global gas markets experienced their largest recorded drop in 2020, with an estimated 2.5% y-o-y 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 climbed to above USD 30/MBtu by mid-January 2021–breaking the record price levels experienced in the aftermath of 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. The impact of these developments will be discussed in the presentation of IEA’s latest publication.