The Gas Exporting Countries Forum (GECF or Forum) ‘Monthly Gas Market Report (MGMR)’ is a monthly publication of the GECF focusing on short-term developments in the global gas market related to the global economy, gas consumption, gas production, gas trade (pipeline gas and LNG), gas storage and energy prices.
The highlights of December report are as follows:
Global economy: The latest forecast from Oxford Economics maintained global GDP growth at 2.6%. However, the anticipated slowdown in economic growth next year prompted a downward revision in the global GDP growth forecast for 2024 by 0.1 percentage points to 2.1%. The Euro area will continue to face multiple headwinds, including contractionary monetary policy and weak industrial activity, but a gradual recovery is anticipated to begin in 2024.
Gas consumption: In November 2023, the European Union (EU) experienced its second consecutive month of increased gas consumption, which amounted to 33.6 billion cubic meters (bcm). This growth was primarily driven by higher demand in the residential and industrial sectors. In China, apparent gas demand — which includes pipeline imports, liquefied natural gas (LNG) imports and domestic production — registered a 7.4% year-on-year (y-o-y) rise, reaching 31 bcm. This increase was largely attributed to the resurgence of economic activities following the easing of strict COVID-19 lockdown measures, signalling a rebound in energy demand. Similarly, the United States (US) observed a 4% y-o-y increase in gas consumption, totalling 81 bcm. This rise was mainly driven by the power generation sector, reflecting a shift in energy sourcing dynamics in response to market and environmental factors.
Gas production: In October 2023, there was a 10% y-o-y reduction in Europe's gas production, bringing it down to 15.2 bcm. This decrease was largely due to lower production from Norway, the Netherlands and the UK. Conversely, in November 2023, the US witnessed a 4% y-o-y increase in gas production with a combined output of 84.9 bcm. Additionally, in the same month, there was a m-o-m increase of 3 units in the global count of gas drilling rigs, totalling 385 rigs. However, this was still a decrease from the 400 rigs noted in November 2022, indicating a y-o-y decline of 15 units.
Gas trade: In the EU, pipeline gas imports stabilised in November 2023, recording 13.6 bcm, just 1% less than the previous month. At the same time, there was a 2.8% y-o-y increase in global LNG imports, reaching 35.4 Mt. The primary contributors to this substantial rise were the Asia Pacific and LAC regions, notably Brazil, China, India, South Korea and Thailand. In contrast, Europe experienced a continued decline in LNG imports for the fifth consecutive month, marked by significant decreases in Greece, Portugal, Spain, Türkiye and the United Kingdom. On the supply side, global LNG exports grew by 1.5% y-o-y to 34.8 Mt, driven by stronger exports from Malaysia, Mozambique, the United Arab Emirates and the US.
Gas storage: Despite the EU experiencing net gas withdrawals toward the end of November 2023, the average volume of gas in storage for the month increased to 104.2 bcm, representing 99% of the total storage capacity of the region. In contrast, the US continued its net injection, with the storage levels rising to 108.1 bcm, equivalent to 81% of the country’s capacity. In Asia, the estimated combined volume of LNG in storage in Japan and South Korea rose to 13.5 bcm.
Energy prices: Gas and LNG spot prices in Europe and Asia rose for the fourth consecutive month in November 2023. The increase in spot prices was influenced by an uptick in European gas demand for heating amidst colder temperatures. However, there was also downward pressure from brimming EU storage levels, robust LNG supply, high Norwegian pipeline gas supply and sluggish Asian LNG demand. The average TTF spot price stood at $13.7/MMBtu, reflecting a modest increase of 2% m-o-m. In addition, the average NEA spot LNG price experienced a 1% m-o-m increase, reaching $15.4/MMBtu. In the upcoming months, temperatures across Europe and Asia will remain the key determinant for spot prices.
Full report is available at:
https://www.gecf.org/_resources/files/mstgmr/mgmr-december-2023.pdf