Gas prices have fluctuated wildly in recent years, rising following the war in Ukraine before levelling off and then crashing as demand fell due to milder weather in Europe last winter.
However, this trend is reversing. Indeed, natural gas prices are on the rise. A World Bank report notes a series of factors which have contributed to this increase since mid-June. “ After experiencing sharp declines in the first quarter of 2024 due to a mild winter, natural gas prices have rebounded […] During the last week of June, natural gas prices in the United States and Europe were 80 and 25% higher, respectively, than their March average ”, says the report.
It should be noted that this increase in prices in Europe and America is due to different reasons. In the United States, the increase in prices is the result of that of demand, of electricity production, as well as the prospect of increased flows from American export terminals of liquefied natural gas LNG in the months to come. In Europe, this increase is due to concerns over recent power outages.
Increase in demand and therefore prices in the future
It should be noted, however, that despite this increase, gas prices have not yet reached their level of the previous year. Looking ahead, the World Bank believes that prices could be higher than expected due to geopolitical developments, reduced US exports and unfavourable weather conditions. The institution emphasises that ” Forecasts call for a 50% increase in US LNG export capacity by 2025. Any delay in this expansion could put upward pressure on global LNG and European gas prices. ».
Concerning the request, the WB indicates that “ In the Asia-Pacific region, natural gas demand was mainly driven by the energy and industrial sectors of China and India, while consumption in North America increased slightly “This demand has however decreased in Europe, states the institution which estimates that ” after two years of stagnation, global demand is still expected to increase by 2% in 2024 and 2025 ».
