LONDON- Global gas prices this year will average even lower than previously expected due to the effects of the novel coronavirus and look set to remain weak for a few years, consultancy Rystad Energy said on Thursday.
Before the virus outbreak, gas prices were already below average due to an oversupply of liquefied natural gas (LNG) in the market.
The European gas benchmark price at the Dutch TTF hub is now forecast at $3.2 per million British thermal unit (MMBtu), down by $0.62 from the previous forecast in February, Rystad Energy said.
Its price forecast for Asian spot LNG was revised to $3.80/mmbtu. Last week, Asian spot LNG prices crashed below $3.00/mmBtu following three weeks of gains.
U.S. Henry Hub gas prices are expected to average $1.94/ mmBtu in 2020 and $2.43/mmBtu next year.
The lower forecasts are based on weaker demand seen globally throughout the year as a result of lower commercial and industrial activity, the consultancy said.
It expects prices to remain low to 2022, then a tightening LNG market could lead to price spikes in 2024 and 2025.
"Following this period, we see downside risk for prices for 2026 and 2027 driven by potential over-investment in 2019 as new supplies begin coming onto the market," the consultancy said.
"However, the downside in prices during this period is more limited than our previous estimate as the lower number of liquefaction projects moving ahead will help keep a better market balance," it added.
(Reporting by Nina Chestney; Editing by Bernadette Baum) ((email@example.com; +44 (0)207 542 8071; Reuters Messaging: firstname.lastname@example.org))