2021: a roller coaster year for gas markets

2021 was a real roller coaster for gas markets. and the 5 key takeaways for me are:

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(1) Record gas prices: we have seen TTF trading at over $60/mmbtu and JKM jumping above $55/mmbtu, while Henry Hub averaged at its highest since 2008. this has been accompanied by an unprecedented price volatility, reaching ~200% in December on TTF MA.

(2) Global gas trade surged by a record of 85 bcm to over 1000 bcm: this was driven by higher pipeline imports into Europe and China, strong LNG growth and recovery in North American pipeline flows.

(3) China surpassed Japan as the world’s largest LNG importer: with its imports jumping by almost 20% yoy, whilst Japan’s LNG imports remained flat on improving nuclear availability;

(4) Gas demand grew more strongly than supply: this resulted in lower storage levels, primarily in Europe and Ukraine, standing about 30 bcm lower compared to last year;

(5) A global gas market is emerging: despite all the volatility, the correlation between Asian spot LNG and European hub prices stood at a record 0.93, as both regions continue to compete for LNG cargoes.

+(1) Gas market reforms goes on: New Gas Law is Brazil, Petroleum Industry Bill in Nigeria, Australia’s ambition to boost the Wallumbilla gas hub and the EU’s Hydrogen and Decarbonized Gas Markets Package. what is your view? what are your key takeaways from 2021? and what we can expect from 2022?

Happy New Year to all!

Source: Greg Molnar (LinkedIn)