- The market for liquefied natural gas will get tighter if China's economy rebounds, the IEA's head said Tuesday.
- That will mean more competition for supply with energy-starved Europe, according to Fatih Birol.
The market for liquefied natural gas will tighten if China's economy rebounds and it goes up against energy-hungry Europe for supply, according to the head of the International Energy Agency.
Fatih Birol stepped up his $4 in global gas supplies even as investors fretted about the potential risk to Chinese economic growth from President Xi Jingping's increased grip on power.
Speaking at a Singapore conference, Birol said only 20 billion cubic metres of new LNG capacity will go to market in 2023, $4.
Europe has been $4 from sellers worldwide, as it tries to replace the flows cut off by Russia in retaliation to Western sanctions over the Ukraine war.
Meanwhile, a zero COVID-related slowdown in China, the world's second-biggest economy, has dampened the outlook for global gas demand. But those coronavirus curbs, which have hit industries and households, could be lifted in coming months.
That sets up a potential tug-of-war for supplies between a revived China, leaving little room to negotiate prices — and that could send natural gas prices higher, after falling over 70% since August.
But with President Xi Jingping consolidating his power in the Communist Party, investors are growing worried on whether $4. He unceremoniously ejected his business-friendly predecessor Hu Jintao from proceedings at the weekend, prompting fears that politics will replace economic growth as a high priority.
And there are signs Beijing might not hit its economic goal for the year. Its GDP rose 3.9% year-on-year in the third quarter, beating expectations for 3.2%. Even so, the print is seen as undershooting what the Chinese government needs to reach its GDP target of 5.5% growth this year.