Gas prices in Europe are declining due to the growth of LNG imports

The cost of gas in Europe is declining on the last day of February amid an increase in imports of liquefied natural gas. The spot price of gas has reached the lowest value since the summer of 2021 – $511 per thousand cubic meters.

Experts also note that prices for «blue fuel» in Europe are declining for the third month in a row as demand falls and the regional energy crisis recedes. This price reduction should help European countries curb inflation and rising energy bills. 

In general, gas demand in the region fell by 13% in 2022, the sharpest pace in the history of observations, against the background of active efforts by companies and households to reduce fuel consumption during a fairly mild winter. 

At the same time, the International Energy Agency warns that the favorable picture for Europe may change this year, as demand for liquefied natural gas is growing in Asia, especially in China, and this increases competition for cargo. 

Earlier last year, China's strict restrictions in connection with Covid limited energy consumption in the country, leaving Europe the opportunity to import record volumes of LNG and fill storage facilities. However, now that the restrictions have been lifted, demand in China may grow by 35% in 2023, which will provoke fierce competition in world markets and another price increase.