The International Energy Agency says they are decreasing gas demands once again. Although oil markets are hopeful to a rebalance next year, the surplus will not disappear right away. They report that an annual increase in global consumption is expected to rise by 1.5 percent through 2021, down from the original of 2 percent prediction and the 2.5 percent gain over years past.
This growth inhibition is driven by the low usage of fuel in the U.S. and Japan as it competes with renewable coal in power generation. They continue, “Slower generation growth, rock-bottom coal prices and robust deployment of renewables constrain gas’s ability to grow faster in today’s low-price environment.”
Globally, the gas market will sustain a surplus until 2018 as supply and demand waits for alignment until 2021. Liquefied natural gas capacity is predicted to jump 45 percent through 2021, with the majority in the U.S. and Australia.
Markets will no doubt have a hard time with the hike as the Japanese reactors come into play with competition of coal and fuel in Europe. The IEA predicts the oil glut to end soon…in 2017.
Article written by HEI contributor Marcela Abarca.