1/21/2025–|Last updated: 1/21/202506:17 PM (Mecca time)
European natural gas prices fluctuated, with traders assessing the prospects of another year of limited supplies in the face of trade war fears sparked by US President Donald Trump’s threats to impose tariffs.
Benchmark futures swung after gains earlier in the day, under pressure from the risks of a renewed global trade conflict on broader commodity markets, threatening consumption and growth.
Increased demand
At the same time, demand for LNG in Europe is expected to increase by more than 15% in 2025 after falling last year, and the balance of the global gas market is expected to remain fragile, the International Energy Agency said in a report today, meaning that Prices may remain higher for longer to attract more fuel shipments, unless energy demand declines in other regions.
Trump referred to plans to impose previously threatened tariffs on Mexico and Canada and repeated a call for the European Union to buy more American oil and gas to avoid potential tariffs, at a time when the United States is the largest supplier of liquefied natural gas in the region.
The president ended a temporary moratorium on issuing new US export licenses, easing some concerns about long-term supplies. Any impact on the market is likely to come later this decade when new projects come online. This year could remain a challenge for Europe; It needs more LNG to cover demand, especially after the loss of Russian gas flows in the pipeline through Ukraine.
German Economy Minister Robert Habeck said on Tuesday that Europe should not depend too much on American energy, and urged Europe to stick together to confront Trump’s decisions, saying: “In a world where we must expect energy supply chains to be exploited for power politics, dependence on energy “It’s always a problem.”
Price support
The old continent has been able to diversify its supplies since the energy crisis three years ago, but the current heating season was a reminder of its weakness, as the cold weather, after two relatively mild winters, led to a faster than usual depletion of gas stocks and prices remained high, which led to prolonging the damage to consumers. .
Cold weather in parts of the United States could support prices in the near term, as it appears to affect some export facilities, according to Engie’s Energy Scan platform.
So far this month, LNG imports have risen in Spain, Turkey and Poland, while flows to northwestern Europe and Italy remain below last year’s levels, according to Bloomberg.
Bloomberg Research analyst Patricio Alvarez said: “President Trump’s goal to increase higher oil and gas production in the United States will not change the outlook for LNG in the near term. Global LNG supplies will not increase until late this year, indicating that competition for… Reserve shipments with Asia may keep upward pressure on European prices as the bloc seeks to replenish a larger storage gap this summer.
Over the next four years to 2028, Europe is expected to solve many of its remaining problems from the crisis “with gas prices likely to halve” with global LNG supplies expected to grow by 40%, Citigroup said in a note.
Dutch gas futures, which are the gas benchmark in Europe, rose to 48,440 euros per megawatt-hour, at the time of writing in Amsterdam.
