Global LNG supply is set to soar over the next five years as a number of large projects in Australia come on stream and the US starts to export. The greater availability of more flexible gas supply should boost the bargaining power of consumers. In this Energy Watch, we discuss the demand and supply outlook for LNG and the likely impact on natural gas prices.
We also address the view that escalating costs of oil exploration and production will put a permanently higher floor under oil prices. In our view, costs are set to fall back as bottlenecks in the supply of equipment and machinery ease. What’s more, supply will be growing strongly as shale production expands outside the US and the scale of unplanned outages diminishes.
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