IEA Foresees Growth for Intl. Gas Demand in 2024

Global gas demand is forecast to grow by 2.5%, or just over 100 Bcm, primarily driven by fast-growing Asian markets, according to the Gas Market Report, Q3 2024, released on July 17 by the Paris-based International Energy Agency (IEA).

Global gas demand growth is expected to fall below 2% y-o-y in the second half of 2024. In part, the easing reflects the gradual recovery in demand, which was already underway in the second half of 2023.

We expect the limited increase in global LNG supply to restrain growth in import markets. Industry emerges as the most important driving force behind global demand, as gas use in the power sector is forecast to increase only marginally, stated IEA in its report.

This is because growth in fast-growing Asian markets and in gas-rich countries in Africa, the Middle East and North America is expected to be partially offset by declines in Europe, the IEA report said.

Preliminary data suggest that global natural gas demand increased by 3% in the first half of 2024. However, 70% of this demand growth was concentrated in the first quarter. LNG supply declined year-on-year in the second quarter, creating upward pressure on gas prices across key import markets, which in turn weighed on demand growth.

According to IEA, Asia accounted for around 60% of the increase in global gas demand in the first half of 2024, with demand in both China and India increasing by just over 10% y-o-y.

Higher gas use in industry contributed to almost 65% of global demand growth in the first half of 2024, it stated.

This, it noted, was primarily supported by the economic expansion of fast-growing Asian markets. Gas use in the power sector grew by a more moderate 2% y-o-y, as the strong gains in North America, fast-growing Asian markets and Eurasia were partially offset by lower gas-fired power generation in Europe.

Gas demand in the residential and commercial sectors grew by 1% y-o-y amid unseasonably warm temperatures in the first quarter.

Combined gas demand in the gas-rich markets of Africa and the Middle East is forecast to increase by 3%. Similarly, Eurasian gas demand is projected to grow by 3% amid higher demand in industry and the residential and commercial sectors.

Year-on-year growth in LNG supply is expected to accelerate during the second half of 2024, with new liquefaction capacity coming online. The US is set to provide the lion’s share of new export capacity this year as existing plants expand and new plants start operating.

This edition of the quarterly Gas Market Report by the IEA provides a thorough review of market developments over the first half of 2024 and a short-term outlook for the remainder of 2024.