The International Energy Agency (IEA) in its annual outlook said that natural gas demand this year is set to post the biggest decline since the global financial crisis in 2009. According to the outlook, worldwide natural gas demand is forecast to decrease 150 Bcm (4%) to 3,850 Bcm in 2020. Natural gas prices have declined to record lows in some key markets amid lockdowns and lower industrial production due to the coronavirus crisis.
Weak demand in European, North American, and Asian markets is expected to contribute to 75% of the world’s overall decline in 2020. Slower economic growth will likely drag gas consumption by the power sector, which is expected to fall by 5% this year. Gas consumption by the industrial sector as well as the residential and commercial sector are also expected to decline by about 4% this year, according to IEA.
IEA expects demand recovery to start in 2021, but it will likely be slow and will not rebound to pre-pandemic levels immediately. Asia, led by China and India, is expected to propel the increase in demand after 2021, IEA added. The agency forecasts that demand growth will average 1.5% annually from 2019-2025. This is compared to EIA’s previous forecast of 1.8% annual growth over the same period.
