Gas Market Report, Q1-2021

Global gas demand fell by an estimated 2.5% or 100 billion cubic metres (bcm) in 2020 – its largest drop on record. Amid this slowdown, gas demand for power generation remained resilient owing to fuel switching, while the whole supply chain showed strong flexibility in adjusting to demand variations. Gas trade globalisation progressed with increasing liquidity, while prices experienced historical lows and extreme volatility. The Covid-19 crisis and a well-supplied market put investment on hold, whereas gas market reforms and clean gas policy initiatives gained momentum in major consuming markets.

2021 opens with price rallies in Asia and Europe as rising winter demand tightened supply, but the price spikes are not expected to last beyond the short-term cold snaps given that market fundamentals for 2021 remain fragile. Global gas demand is expected to recover its 2019 level but with uncertainties regarding the recovery trajectory of fast-growing markets compared with more mature regions. Sectoral demand, on the other hand, is subject to a variety of risk factors including fuel switching, slow industrial rebound or milder weather.

This new quarterly report offers a detailed analysis of recent developments in global gas markets and the near-term outlook, and includes an overview of the main market highlights for 2020.