PIRA Energy Group said it believes that the Asian demand outlook remains essentially weak and will not begin to turn around, even in the face of some of the lowest LNG prices in over a year.
PIRA has pared down its demand growth outlook for the year. More LNG will be coming to Europe in the months ahead, which will backstop production losses in the Netherlands and feed renewed demand for gas in the power sector, now that spot and oil-indexed prices are lower.
European Gas Price Scorecard
According to PIRA, it is becoming clearer that the demand side of the gas fundamentals equation is becoming stronger, which does not surprise it given that PIRA has been forecasting 7% growth for Europe in 2015 since late last year.
The next major event to emerge in the gas market will be the beginning of peak maintenance season in Norway. The first major cuts will emerge in the second week of April, which helps to explain the 2-3p/th (€1-1.5/MWh) backwardation with the May contract.
The maintenance pattern has been set for some time, so no surprises appear to face the market in the weeks ahead, PIRA added.