Commodity Market Report

Light at the end of the tunnel: European gas markets long-term outlook highlights - H2 2016

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13 December 2016

Light at the end of the tunnel: European gas markets long-term outlook highlights - H2 2016

Report summary

Global gas and LNG prices have been rallying ahead of this winter supported by high coal prices and booming LNG demand in China and India. With global LNG supply increasing by more than 10% in 2017 we expect LNG prices will soon come under pressure, despite increasing oil prices. But while an oversupplied global gas/LNG market remains inevitable for the next years, our H2 2016 update is for a tighter global gas market post 2019. Higher Asian LNG demand, lower European domestic production and higher coal prices, all combine for higher LNG prices, particularly in Asia. We outline the levers, and the risks, in this short note.

Table of contents

    • Booming China and South Asia to offset falling JKT demand
    • Market fundamentals in Europe are tightening
    • but pipeline imports in Europe are resilient
    • European spot prices will be set by US Gulf Coast LNG FOB in the medium term
    • Who is best positioned as the market recovers post 2023?
    • Multiple risks exist

Tables and charts

This report includes 2 images and tables including:

  • US LNG output and utilisation
  • LNG available to Europe vs flows

What's included

This report contains:

  • Document

    European Energy Service - Global Gas Prices - H2 2016.xls

    XLS 240.50 KB

  • Document

    Light at the end of the tunnel: European gas markets long-term outlook highlights - H2 2016

    PDF 266.06 KB

  • Document

    Light at the end of the tunnel: European gas markets long-term outlook highlights - H2 2016

    ZIP 339.15 KB

  • Document

    Executive summary

    PDF 106.25 KB