Gas Outlook for 2024
European countries will soften some of the most ambitious low-carbon investment targets because of cost and Asian markets will do little to promote policies that support gas at the expenses of coal in 2024, according to global insights business Wood Mackenzie.
In its report – Global Gas and LNG: 5 things to look out for in 2024, Wood Mackenzie said global LNG supply growth would remain limited and with Asian LNG demand still weak, competition for LNG was unlikely to heat up.
But it warned that risks remained.
“Despite most meteorologists forecasting a warm winter, cold spells could yet materialise, and these would pull gas from storage and send prices higher,” it said.
“Russian pipeline and LNG imports could yet be banned, or curtailed, resulting in Europe having to compete for more LNG.
“And supply disruptions globally, or just the risk of them, will continue to have disproportionate effects on prices.”
On carbon policies, Wood Mackenzie said that in Europe, which has been at the forefront of low carbon policies, affordability was becoming increasingly important as growing public awareness of the cost of low-carbon technologies entered the political debate.
“Some governments have already scaled back subsidies for low-carbon technologies and energy efficiencies (Germany and Italy) while others have revised targets to ban gas boilers (UK, France and the Netherlands),” the report said.
The outcome of the European Parliament elections in June 2024 will be a key marker to understand the pace at which the European Commission and member states will be pushing the energy transition agenda.
Affordability and security of supply would also be at the forefront of policies across Asia, particularly in emerging markets where growth in energy availability is key to support economic growth.
“Many emerging markets in Asia continue to rely on coal, which is cheaper than gas and often available domestically,” it said.
“It is only through an increased focus on sustainability and the development of policies that support gas and renewable at the expenses of coal, that gas can unlock its full growth potential in these markets.
“This will require the implementation of carbon taxes and/or outright restrictions on coal generation.
“But gas/LNG prices might have to fall further for carbon policies to be adopted in Asia, as governments remain concerned about the cost that these policies could have on consumers and economic growth potential.”
In other predictions, it said:
- Global gas demand growth would remain limited.
- Spot charter rates will soften, but risks remain.
- LNG contracting and FID activity will ease.