Price stability in the gas market can only be ensured by a clear excess of global gas liquefaction capacity, this may happen no earlier than in two to four years if the growing demand for gas in Asia does not outstrip the increase in these capacities.
According to expert estimates, in conditions of instability of external supplies (Europe has actually refused pipeline gas from Russia, and the availability of LNG strongly depends on demand in Asia), the risk of gas shortages (or at least its threat) in some cold periods remains, which may again lead to a sharp increase in prices.
However, given the continuing decline in gas consumption in Europe, high prices should not last for a long time, correcting down immediately when eliminating – or even reducing – the threat of this deficit.
It should be noted that gas prices on the European market significantly increased in the spring of 2021. Then the quotes fluctuated in the range of 250-300 dollars per thousand cubic meters, by the end of summer they exceeded 600 dollars, and in the fall − already 1 thousand dollars.
In the winter of 2021-2022, prices crossed the threshold of $ 2,000 per thousand cubic meters, and in early spring, due to fears of a ban on the import of Russian energy resources, they reached a record high of $ 3,892. There have not been such consistently high prices in the entire history of the operation of gas hubs in Europe − since 1996.
From the end of last year − the cost of gas went down, until on May 25, for the first time in two years, it fell below $ 300 per thousand cubic meters. The average estimated price of gas futures at the end of the summer was $ 365, which is about twice the average long-term levels.
Caspian Barrel
