Thursday, 11 November 2010

Gas prices to remain depressed for another decade

The energy statistics organisation has previously predicted an abundance of
gas for five years due to new "shale" reserves being exploited in the US and
the growing ability of gas companies to ship the fuel in liquefied form
(LNG). However, the IEA now believes the glut could last a decade and keep prices
lower for longer. There will be an oversupply of about 200bn extra cubic metres next year, up
from 130bn cubic metres this year, it said. This is likely to reduce prices
as a greater range of sources will loosen the grip of the traditional gas
producers, such as Gazprom, which insist on long-term contracts with
customers. These are linked to the oil price, which is increasing and has
decoupled from the gas price.

No comments:

Post a Comment