By Giulia Petroni


Global demand for gas is set to pick up this year amid colder weather and rising consumption across emerging markets, the International Energy Agency said. But limited increases in the production of liquefied natural gas mean supply is likely to remain tight.

Demand is forecast to grow by 2.5% in 2024, boosted by an increased use of heating in the residential and commercial sectors as winter temperatures are expected to be lower than last year, according to the Paris-based organization's latest report. In 2023, demand rose by 0.5%.

"The global gas market is entering a new period as the world gradually emerges from an energy crisis that had profound impacts on both the supply and demand sides," IEA Director of Energy Markets and Security Keisuke Sadamori said Friday. "We expect to see solid growth in global gas demand this year as prices have come down to relatively manageable levels."

Consumption will be driven by fast-growing markets in the Asia Pacific region and gas-rich countries across Africa and the Middle East, while a massive expansion of renewable power should reduce the need for gas-fired generation in mature markets, the IEA said.

However, supply is still expected to remain tight, as a limited increase in global LNG production is likely to cap the expansion of gas use in import markets.

The IEA expects supplies of LNG to grow by 3.5% this year, a much slower pace than the 8% growth rate recorded between 2016 and 2020. This is partly due to delays in liquefaction plants and issues related to the availability of feedgas--dry natural gas that is used as raw material for LNG--for existing projects.

"With supply forecast to be tight again in 2024, a limited increase in global LNG output is expected to restrain demand growth, notably for Europe and the mature markets of Asia," the agency said.

Meanwhile, heightened geopolitical tensions in the Middle East and the war in Ukraine remain the biggest factors of risk for gas markets, casting uncertainty on the current outlook and potentially driving price volatility this year, according to the IEA.


Write to Giulia Petroni at giulia.petroni@wsj.com


(END) Dow Jones Newswires

01-26-24 0808ET