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Trends in the Natural Gas Market for 2024

Natural Gas

As we enter 2024, the global natural gas market is changing rapidly. New technology, political factors, and the move toward cleaner energy are all influencing the industry.  This article highlights the main trends in the natural gas market for 2024. Companies like Great Energy 1 can stay competitive by understanding these trends and adapting to them.

Global Gas Markets Grew In The First Half Of 2024. 

In 2024, gas markets showed some signs of growth after facing challenges in 2022 and a slow recovery in 2023. Global gas demand grew by 3% compared to the previous year, which is higher than the usual 2% growth seen from 2010 to 2020. However, this recovery is still not very strong. 

In the second quarter of 2024, global LNG (liquefied natural gas) production was lower than expected, and political tensions have made gas prices unstable. In the first quarter of 2024, gas prices dropped to levels seen before the global energy crisis, but they have risen again in recent months because of tighter supply and demand.

Looking ahead, gas demand is expected to grow more slowly in the second half of 2024. Fast-growing markets in Asia will likely drive global gas demand up by 2.5% each year.

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Asia Led The Rise In Global Gas Demand During Early 2024.

Global gas demand grew by 3% in the first half of 2024. Most of this growth (70%) happened in the first three months of the year. In the second quarter, the supply of liquefied natural gas (LNG) fell compared to last year, which led to higher gas prices in major importing countries. This rise in prices slowed down the growth of gas demand.

Asia was the biggest driver of this growth, making up about 60% of the global increase in demand. China and India saw gas use rise by more than 10% each. The industrial sector was the main contributor to the increase, responsible for nearly 65% of the rise in demand, mainly due to the fast growth of Asian economies. Gas use for power generation also increased by 2% compared to last year.

While demand grew in North America, Asia, and Eurasia, there was a decline in gas use in Europe. Gas demand for homes and businesses increased by 1% because the first quarter of the year was warmer than usual.

Global Lng Supply Went Down In The Second Quarter Of 2024. 

It has never dropped this before the 2020 Covid lockdowns. Global LNG supply hardly changed in the first half 2024—just 2% or six bcm. The first quarter saw most of this expansion; LNG output increased by 4.5%, or 6.5 bcm. LNG output dropped by 0.5%, or 0.5 bcm, in the second quarter from the previous year. Since the COVID lockdowns, this is the first dip; it greatly affected LNG demand and shipment cancellals. The second quarter drop was due to problems with feed gas supply and unexpected shutdowns.

LNG supply is expected to grow faster in the second half of 2024 because new liquefaction plants will start working. The United States will lead in adding more export capacity this year. This includes the expansion of Freeport LNG, the increase of Plaquemines LNG Phase 1 over the summer, and the start-up of Corpus Christi Stage 3 by the end of 2024. The Tortue FLNG plant, located off the coast of West Africa, is also expected to start in the fourth quarter.

Natural Gas Prices Went Up In All Major Markets In The Second Quarter. 

Global LNG supply has barely changed in the first half of 2024, increasing by only 2% or 6 billion cubic meters (bcm). Most of this growth happened in the first quarter, where LNG output went up by 4.5% or 6.5 bcm. However, in the second quarter, LNG output dropped by 0.5% or 0.5 bcm compared to the previous year. This was the first decline since the COVID-19 lockdowns, which had a big impact on LNG demand and caused shipment cancellations. The drop in the second quarter was mainly due to issues with feed gas supply and unexpected plant shutdowns.

Looking ahead, LNG supply is expected to grow more quickly in the second half of 2024 as new liquefaction plants begin operation. The United States will play a leading role in increasing export capacity, with projects like the expansion of Freeport LNG, the growth of Plaquemines LNG Phase 1 in the summer, and the launch of Corpus Christi Stage 3 by the end of the year. Additionally, the Tortue FLNG plant off the coast of West Africa is set to start in the fourth quarter.

Natural Gas Demand Is Expected To Grow More Slowly In The Second Half Of 2024.

Global gas demand is expected to grow by less than 2% this year compared to last year. This is because demand started to pick up again in late 2023. For 2024, gas demand is predicted to increase by 2.5%, or about 100 billion cubic meters.

Gas demand is expected to grow, but not as quickly in some areas because there isn’t enough liquefied natural gas (LNG) available for import. The industrial sector will need the most gas, while gas use for making electricity will only grow a little. Fast-growing countries in Asia and gas-rich regions like Africa, the Middle East, and North America will see strong demand for gas. However, this growth will be partly balanced out by lower demand in Europe.

The Supply Of Low-Emissions Gas Is Expected To Grow Fast By 2027. 

The supply of low-emissions gas could more than double, adding almost 16 billion cubic meters (bcm) compared to last year’s forecast. This growth is mainly due to stronger government support. Europe and North America will lead this increase, making up over 70% of the growth. However, more work is still needed to meet the goals set by various governments. In addition to Europe and North America, countries like Brazil, China, and India will also boost their production of low-emissions gas.

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Conclusion 

The natural gas market in 2024 is navigating both recovery and challenges. Global demand is projected to rise, driven primarily by strong growth in Asia. Nevertheless, supply issues and geopolitical risks could temper this expansion. For instance, a decline in LNG production during the second quarter revealed vulnerabilities in the supply chain, which may influence market trends in the months ahead.

At the same time, U.S. LNG exports are expected to increase, underscoring the country’s growing role in meeting global energy demands as new facilities come online. However, natural gas prices are likely to fluctuate depending on production levels and international demand.

Companies like Great Energy 1, based in the U.S., must stay attuned to emerging technologies and policy shifts to remain competitive. Ultimately, the natural gas market in 2024 and beyond will be shaped by a complex interplay of supply, demand, and geopolitical factors.

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