BAKU, Azerbaijan, April 21. The rate of growth in global gas demand is expected to turn negative in 2022, Trend reports with reference to the International Energy Agency (IEA).
Higher electricity demand sustained gas growth in North America during the winter, although growth is expected to remain limited and uncertain for 2022, the agency said in its latest report.
Natural gas consumption experienced high growth rates in the first half of 2021. In the first quarter it increased by an estimated 6 percent y-o-y globally. Weather-related factors played a strong role, as early 2021 was colder than the exceptionally mild winter of 2019/20 in the northern hemisphere. A rebound in economic activity also had some impact in Q1 2021, especially in China, which was hit by the pandemic in the first quarter of 2020.
The bulk of the effect of economic recovery was visible in Q2 2021, with an estimated quarterly rise in gas consumption of above 8 percent, a year on from the greatest impacts of Covid-induced lockdown measures in 2020. While all regions benefited from this rebound, Europe was particularly affected because of the severe drop in consumption observed in Q2 2020, leading to a 23 percent y-o-y increase in the second quarter of 2021.
The recovery coincided with weather-related factors, including a colder spring in Europe and record droughts in South America, which prompted a surge in gas consumption for power generation in Brazil to compensate for the lack of hydro capacity. Growth in gas consumption slowed significantly in the second half of 2021, at about 3 percent in Q3 and down to 1 percent in Q4. This resulted from the diminishing immediate impact of recovery and a tightening global gas market that prompted a steep rise in spot gas prices in Europe and Asia. This challenging environment led to slower consumption growth, fuel switching away from natural gas and in some cases demand destruction. The industrial sector provides a good illustration of this trend, with monthly consumption data from major markets clearly emphasising at first a jump in gas consumption compared to 2020 in the first half of 2021, then slower growth in Q3, and finally negative growth in the closing months of 2021 on a combination of lower economic activity, periodic gas supply constraints and soaring fuel prices.
---
Follow the author on Twitter: @Lyaman_Zeyn