2023 in review
And a look ahead to next year in Energy Flux
It’s been another wildly unpredictable year in gas and energy markets. Europe coped surprisingly well after losing almost all Russian pipeline gas, although the ~€1 trillion bill for switching to liquefied natural gas (LNG) will leave a lasting scar.
There’s been no lack of exogenous shocks: strikes in Australia, Israel’s war on Gaza, extreme congestion on the Panama Canal and now an unfolding shipping crisis in the Red Sea. But none of this has (yet) halted the steady decline in European natural gas prices, which are well below where many observers expected them to be at this stage of wartime winter.
The softening in prices is bringing much-needed relief to consumers. But that’s not to say that all is well – far from it. Europeans continue to be fleeced for natural gas, paying well in excess of the cost of production thanks to a complex mix of factors that are hurting growth prospects for LNG in global markets. Despite this, construction of LNG terminals continues at a giddying rate ac…