Page 37 - Policy_Economic_Report_September2020

Policy and Economic Report:
Oil & Gas Market

Natural Gas Market

Natural Gas Price

Global gas market saw different trends across different geographies. Gas price in the Henry hub went up
by 31.6% to reach $2.29/MMBtu. Rationalization of gas production to match the gas demand and increase
in consumption of Natural Gas by industrial users helped the Henry hub price to increase in the month of
August. With winter approaching, the demand is likely to shoot up and could increase the gas prices
further up in US.

Natural gas prices in Europe went up by 58.9% in the month of August. With industrial activities
performing better than the expectation, demand for Natural gas picked up in the month as helped in
recovery of the gas price. Average gas price in the Europe stood at USD 2.86 .MMBtu.

Asian LNG prices jumped to a more than four-month high to reach $3.10 per MMBtu. September deliveries
in the region stood close to $3 per MMBtu across all the major producers in the region. October delivery
is estimated to be $3.50 per MMBtu due the bullish behavior from the market. Japan LNG benchmarks
decline by 13.2 % due to rise in imports of LNG cargoes leading to market surplus situation.

Figure 8: Global natural gas price trends

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Henry Hub Natural Gas Spot Price Domestic gas price Natural gas, Europe Spot LNG price, Japan

Source: EIA, WORLD BANK

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September 2020