Quarterly Gas Review – Issue 14
In our latest Gas Quarterly, we review the gas price rally in Europe, supported by rising coal and carbon prices within Europe and LNG prices in Asia. Looking forward, the market sentiment – as expressed in the forward curve – seems to be that the current high prices will continue, as storage injections remain sluggish and Europe looks set to enter the winter with storage stocks well below the levels of recent years. Gazprom, as the largest external supplier to Europe, has dramatically scaled back its spot sales via its own Electronic Sales Platform, and is flowing slightly less gas to Europe via Ukraine than last year, and significantly less than in 2019. We address the question of whether Gazprom is ‘holding back’ volumes from Europe, in support of the current high prices. Finally, we analyse the surge in Chinese gas demand that is drawing LNG cargoes away from Europe and could make China the world’s largest LNG importer by volume in 2021.