Oxford Energy Podcast – $2 Gas in Europe (Part III): Down, Down, Deeper and Down
European gas prices have crashed below $2/MMBtu this summer. Storage in Europe, which has played a crucial role in absorbing excess LNG, could be full in August. The moment of truth will then have arrived for the global gas market and, unless more supply is shut in, prices could turn negative. The forward curve suggests a doubling of TTF prices in summer 2021 over 2020, which may only happen if LNG flows to Europe are significantly reduced in 2021. This would require a big rebound in Asia LNG demand of the order of 20 per cent year on year. In the absence of this, prices in Europe, and in Asia, may stay at stubbornly low levels through 2021, prompting more LNG shut-ins.