Equinor anticipates a tighter European gas markets this winter

Equinor's chief financial officer said on Wednesday that the outlook for Europe's gas market is tighter this winter than most had anticipated, as storage levels in Europe are 12 percentage points less than they were a year earlier.

In 2022, the Norwegian company will overtake Russia's Gazprom to become Europe's largest natural gas supplier when Moscow's invasion of Ukraine disrupts decades-old energy ties.

Torgrim Reitan, in an interview conducted on the sidelines the company's earnings announcement, said: "We are entering this winter into a market which is tighter than most people think."

He said that Europe was entering winter, the time of highest demand, and gas storages were 83% full. This is 12 percentage points less than last year.

Reitan explained that if the winter is colder than it was last year, there can be a significant change in prices.

Equinor expects a 3% annual increase in Asian LNG demand.

Lower Gas Prices - More LNG Supply

Reitan stated that in the future, there will be a large amount of LNG coming onto the market. Equinor also lowered their long-term outlook for gas prices to $8/MMBTU by 2030, down from $9/MMBTU currently.

The International Energy Agency stated earlier this week that a record amount of new LNG capacities coming online by 2030 will transform the dynamics of the gas market, by strengthening global supply and easing pressure on markets.

Reitan stated that the U.S. power consumption will increase due to data centres and AI. This will impact on gas bills and power demand in the U.S.

"So this could put restrictions on LNG imports," he said.

Equinor reported a larger-than-expected decline in its third-quarter profits as oil and natural gas prices dropped. It also booked asset impairments due to a weaker outlook for crude oil price on the long-term. Reporting by Nora Buli. Terje Solsvik wrote the article. Mark Potter and Gwladys Fauch edited the text.

(source: Reuters)