Global gas demand set for stronger growth in 2024 despite heightened geopolitical uncertainty

Global gas demand set for stronger growth in 2024 despite heightened geopolitical uncertainty
# 26 January 2024 16:05 (UTC +04:00)

Growth in global gas demand is set to pick up this year due to colder winter temperatures and easing prices, with emerging economies leading the increase in consumption, but geopolitical risks and supply-side concerns could trigger renewed price volatility, according to the IEA’s latest Gas Market Report, APA-Economics reports.

In 2023, global gas demand rose by just 0.5%, as growth in China, North America and gas-rich countries in Africa and the Middle East was partially offset by declines in other regions. As pandemic restrictions loosened and economic activity returned, China regained its position as the world’s largest LNG importer (although China’s LNG imports in 2023 were still below 2021 levels) as natural gas demand grew by 7%. In contrast, natural gas consumption in Europe fell by 7%, reaching its lowest level since 1995. This decline was compounded by the rapid expansion of renewables and an increased availability of nuclear power weighing on natural gas demand in both Europe and mature markets in Asia, driving prices lower.

In 2024, global gas demand is forecast to grow by 2.5%, or 100 billion cubic metres (bcm). Expected colder winter weather in 2024, compared with the unusually mild temperatures experienced in 2023, is likely to bring increasing demand for space heating in residential and commercial sectors. Natural gas prices have fallen sharply following the record highs seen in 2022, which is also supporting the recovery in gas demand. While prices remain well above historical averages, demand in price-sensitive industrial sectors will see a return to growth, according to the report. In power generation, gas use is forecast to increase only marginally, as higher gas burn in the Asia Pacific region, North America and the Middle East is forecast to be partly offset by reduced demand in Europe.

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