"Global Gas Glut: Navigating Through Record Surpluses and Falling Prices"

The global gas markets are currently experiencing an unprecedented surplus, largely due to the unseasonably warm winter that has passed. This has been highlighted in reports by CNBC, which draws upon analytics data to outline the scale of the situation. Forecasts by Morgan Stanley suggest that in the coming years, the gas market will face record levels of excess supply, a phenomenon not seen in many years. Bank strategists have pointed out that the world is currently in the process of adding capacities to produce over 150 million tons of liquefied natural gas (LNG) annually. This increase in supply is expected to drive prices down even further.

According to the head of S&P Global for emerging gas and LNG markets in Asia, Ji Xin Chong, natural gas prices worldwide are declining due to the mild winter in the Northern Hemisphere regions, including the United States, Europe, and North Asia. For instance, the U.S. (the world's largest consumer of LNG) experienced its warmest winter season, while Europe had its second warmest winter in recorded history. This led to a significant drop in heating demand and, consequently, in gas consumption.

Experts believe that European countries stand to benefit the most from the falling fuel prices. After the reduction in gas supplies from Russia, LNG imports into the EU have increased by a third, and the low prices have helped maintain the affordability of these fuel purchases. The decrease in prices is also beneficial for India and Thailand, where imported gas accounts for 30 to 50 percent of the total energy supply volume.

Furthermore, it was revealed that in March 2024, LNG supply volumes to the Asia-Pacific region increased by 12 percent compared to the same period last year, reaching 24 million tons. According to analysts from Kpler, China, India, and Thailand have been the leaders in terms of import growth rates. China increased its purchases by 22 percent compared to March 2023, while India saw an almost 30 percent increase.

This record gas surplus poses both challenges and opportunities for the global market. While it leads to lower energy costs for consumers and industries, it also signals a need for adjustments in production and supply strategies to stabilize the market. The situation underscores the volatile nature of the energy sector and the importance of strategic planning and innovation to navigate through periods of excess supply.