Baku, Azerbaijan, April 23
By Leman Zeynalova – Trend:
The first quarter of 2019 will mark the 2019 nadir for liquefied natural gas (LNG) prices, but an ongoing ramp up of supply in Russia and the US should constrain future price gains, Trend reports citing UK-based Capital Economics Consulting company.
‘Therefore, we expect the price of spot LNG to average $5.6 per mBtu in 2019, down from $9.7 in 2018. Elsewhere, the price of US natural gas has fallen sharply since reaching its highest price in over four years at the end of 2018. We expect prices to pick up gradually from here, as the impact of unseasonably warm weather towards the end of last year subsides. Likewise, unseasonably mild weather has weighed on the price of coal too, reflected in the rise in stocks at ARA ports in Europe," reads a report from Capital Economics.
Despite this, the company thinks that a modest seasonal boost to prices later in 2019 will them from current lows.
" Going forward, we see demand growth for gas outstripping that of coal, as government policy continues to favour a switch away from the latter. This is particularly the case in China, and is consistent with our more downbeat long-term outlook for coal prices," said the report.
Admittedly, much of this is predicated on China continuing to substitute coal for cleaner – albeit more expensive – energy sources, according to Capital Economics.
"But if actual or expected growth in China were to deteriorate, there may be less official support for policies to reduce coal consumption."
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