The Zhitong Finance App learned that the head of Woodside, Australia's largest liquefied natural gas (LNG) exporter, recently said in an interview that global natural gas prices are currently showing sharp fluctuations, especially in the European market. This is “an important warning sign that the natural gas market is much more tense than many traders and investors expect.” Australia's largest gas exporter and Macao's largest gas supplier saw tremendous pressure from price fluctuations and said that the prospects for gas supply to Russian pipelines are still uncertain, making the decline in European gas reserves heightening market concerns.

“If you go back two months ago, people will feel that the market is really optimistic, and European and Asian countries have sufficient reserves of natural gas. '” Meg O'Neill, CEO of Australian gas giant Woodside Energy Group Ltd. (Woodside Energy Group Ltd.), said in an interview on the sidelines of the London Energy Intelligence Forum on Tuesday. “However, after just a few weeks, we saw signs of inventory pressure.”

Among them, prices in the European gas futures market have continued to fluctuate drastically. Since the beginning of the heating season in mainland Europe in October, due to the intensification of the Russian-Ukrainian conflict and the peak of LNG demand in Asian countries, the haze of natural gas supply continues to loom over Europe, the European gas price benchmark, TTF gas futures contract price, has risen nearly 20% since then. Despite a slight decline on Tuesday, TTF natural gas futures prices are still close to the highest point in the year.Futures tradingThe growing pessimism among employees about the prospects for gas supply to Russian pipelines has heightened anxiety in the entire gas market.

Meanwhile, natural gas stocks at European storage facilities (which were Europe's energy lifeline during the coldest period) have declined rapidly since October after the cold weather caused a sharp increase in heating demand in the region and a sharp decline in wind power generation required more gas-based electricity supply. Due to its high efficiency and clean energy properties, natural gas has continued to be the core fuel of the European power system in recent years.

“Some countries will continue to reserve gas on a large scale and sign long-term contracts to ensure they have the natural gas resources they need, while others may face difficulties.” O'Neill said in an interview.

Europe's cooling climate and a sharp increase in heating demand are likely to put more pressure on traditional pipeline gas suppliers and the supply side of the global LNG market. However, from a long-term perspective, the entry of a new batch of liquefied natural gas production capacity into the market should ease this very tight supply situation.

“Weather has always been an uncertain factor in global gas supply and demand. If we experience unusually cold or prolonged cold weather, things can get a little tricky.” O'Neill said in an interview. “I do expect that for at least the next year or so, the situation may be tense, and then supply will increase slightly.”

According to information, LSEG, a well-known market research and data statistics agency, recently released the “European Gas and LNG Market Outlook for Winter 2024”. The agency stated in the report that further geopolitical turmoil or supply disruptions or push up European gas prices in winter, and also emphasized that the liquefied natural gas market remains sensitive to risks. These risks include possible supply disruptions in major exporters such as Australia, the US, and Russia. Furthermore, LSEG said that Egypt was changing from a liquefied natural gas exporter to an importer due to domestic production challenges, which also heightened concerns about the shortage of supply in the market.