Natural gas has long been in demand worldwide and is widely utilized for delivering power to homes and businesses. Recent statistics suggest that, on the whole, the demand for natural gas continues to grow, with Europe the only continent that is expected to see a drop in the demand over the next 30 years.
But what about the price of natural gas, and how does the demand forecast for 2024 look?
Factors That Affect the Price of Natural Gas
Multiple factors can influence the supply and demand of natural gas, each influencing the commodity’s overall value. Some common aspects include:
- Production Volume: if a key producer of natural gas increases or decreases the amount created, this has a knock-on effect on the price.
- Imports and Exports: a rise or fall in a country’s imports or exports is usually directly related to supply and demand or production issues and can significantly affect the value of natural gas.
- Weather and Temperature: hotter temperatures, particularly during winter, can lower demand for natural gas for both business and domestic properties. This can result in lower prices.
- Other Fossil Fuels: the price of natural gas closely relates to the value and demand of similar commodities and fossil fuels such as crude oil.
- The Overall Economy: in a healthy economy, the population generally has more disposable income. It is likely to spend more on their home heating, whereas in volatile economic conditions, people tend to try and save money on their household heating bills.
Natural Gas Price Expectations in 2024
Those with a keen interest in commodity trading will be looking ahead to 2024 to get an idea of how supply and demand will likely affect the price of natural gas in the coming months.
There are various factors to consider when analyzing any likely changes in value, such as Europe’s supplies on the back of the Russian and Ukraine conflict, winter weather conditions, gas infrastructure strains, and the recent conflict in Israel.
There is likely to be some volatility in the upcoming months, which could see prices rise somewhat, though perhaps not to the same extent as we’ve seen in the previous two years.
With many countries working towards an energy reduction plan, the price of natural gas could decline, albeit slowly, over the next few years. Looking ahead five years, it’s possible to expect lower prices due to demand decreasing. If current conflicts are resolved, this could also help ease the pressure on natural gas supplies and further reduce their value.
Finally, when trading natural gas or other related commodities, keeping on top of global news, especially around conflict and political matters, is imperative to help determine whether we’re heading for a bull or bear market.
