Evolution of the prices of natural gas in the main market zones

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Definition

This graph presents the evolution of wholesale prices for the three main market zones: Western Europe, North America and Southeast Asia (including Japan).

Analysis

Until 2009, general trends in the three zones where mostly in line. In 2009, a real divergence started. On one hand, the price of gas in Asia skyrocketed mainly because of the Fukushima nuclear disaster. On the other hand, the rise of unconventional natural gas exploitation in the United States explains the sustained drop in prices on the American continent since 2008. Under theses circumstances, the spread between these two countries has reached a record level (39.05€/MWh in 2012). Since 2016, LNG prices in Asia have almost halved. This is due to the indexation of many long-terms contracts on oil prices, which have decreased by 50% in 6 months. Since the beginning of 2016, prices have increased, reflecting the oil barrel’s price continuous rise. It can be explained by a re-balance of supply and demand. In January 2017, OPEC finally reached an agreement to reduce oil production worldwide, resulting in the increase of stock market price. The gas being indexed on the oil price, this translates into an increase in the price of gas on the different markets.

World Data Bank (2018)