The International Energy Agency (IEA) in its Global Energy Review 2020 said that historically warm temperature in the northern hemisphere depressed natural gas demand in the first quarter of 2020 before the coronavirus pandemic exacerbated the market later in the quarter. Natural gas consumption in the quarter is estimated to fall by 2.6% year-on-year in Europe and 4.5% in the US.
In Asia, LNG imports declined 3% year-on-year in Japan in January and February. South Korea’s domestic sales fell by 2.5% for the same period, while natural gas demand in China was relatively stagnant. In contrast, demand in India expanded by nearly 8% in January and February compared to the same months a year ago. Globally, natural gas consumption fell by over 3% year-on-year in the first quarter of 2020.
Despite falling demand, supply continued to increase, resulting in a considerable build-up of gas inventories. US dry gas production grew by 7% year-on-year in Q1 2020. The low spot prices supported the global LNG trade, which increased by about 13%.
IEA predicted that the 2020 global natural gas demand would decrease by 5%, less severe decline compared to oil. Nonetheless, it marks the first annual decline in consumption since 2009 and represents a massive shock to the gas industry. Gas demand from the power sector is expected to fall 7% this year, while demand by the industrial and energy sectors is expected to drop 5% and 4%, respectively. Faster recovery after lockdowns in Europe and North America would ease the decline in global gas demand to 2.7% instead 5%, IEA added.
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Published on May 15, 2020 2:42 PM (GMT+8)Last Updated on May 15, 2020 2:42 PM (GMT+8)
