Gas Market Report, Q1-2024
About this report
Natural gas markets moved towards a gradual rebalancing in 2023, despite tighter supply fundamentals. Demand reductions in Europe and mature markets in Asia softened the impact of the gas supply shock of 2022. Prices came down significantly in 2023, although they remained well above their historical averages, both in Asia and Europe.
Natural gas markets are expected to see a return to strong growth in 2024, primarily driven by the industrial and power sectors in fast-growing economies in Asia and gas-rich countries in Africa and the Middle East. An expected return to average winter weather conditions, after an exceptionally mild 2023, is expected to support higher demand for space heating in the Northern Hemisphere. However, the continued expansion of renewables and improving nuclear availability are likely to temper requirements for gas-fired power generation in mature markets.
High inventory levels together with an improving supply outlook are providing gas markets with some reassurance for 2024. However, geopolitical tensions, rising shipping constraints, LNG project delays and adverse weather conditions could renew market tensions and fuel price volatility. Security of supply for natural gas remains a key aspect of energy policy making and the risks related to our outlook highlight the need to strengthen international co-operation, including in assessing and implementing flexibility options along gas and LNG value chains.
This edition of the quarterly Gas Market Report by the International Energy Agency (IEA) provides a thorough review of market developments in 2023 and a short-term outlook for 2024. It also includes a special spotlight on greenhouse gas emissions along gas supply chains that examines emissions reduction initiatives undertaken by the largest natural gas and LNG producers and consumers. As part of the IEA’s Low-Emissions Gases Work Programme, the report includes a section on policy and market developments related to biomethane, low-emissions hydrogen and e-methane.