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Energy markets appear to be in a precarious balance, but the energy crisis is not over, Michael LaMotte, senior managing director at investment firm Guggenheim Partners, said at the CERAWeek energy conference in Houston this week.
"We may have gotten through this winter surprisingly well, but I don't think we're out of the woods yet," LaMotte said, as carried by Reuters.
"And things actually could get worse before they get better," the investment banker added.
Uncertainties about supplies related to the Russian invasion of Ukraine and tight oil production spare capacity globally could disrupt the oil and gas markets, executives and bankers said during panel discussions at one of the biggest annual events in the energy industry.
Concerns in Europe have eased amid high LNG imports, lower consumption, and natural gas inventories well above the average for this time of the year.
However, the race to ensure supply for next winter hasn't even started in earnest yet. Prices are set to hold higher than before the Russian invasion of Ukraine through the summer as Europe will face stiffer competition from Asia for LNG supply.
Last year, Asia—including China—saw lukewarm demand amid high spot prices and a slowdown in the Chinese economy. With China's reopening, however, demand for gas and LNG is set to rebound, increasing the competition between Asia and Europe for spot supply, analysts say.
Moreover, the weather in Europe has been milder than usual for prolonged periods so far this winter, allowing for less gas consumption for heating and power generation. It is far from certain that Europe, and the northern hemisphere as a whole, will see mild temperatures next winter, too.
Governments and regulators in the EU say that while a major gas shortage crisis has been averted for this winter, next winter could be more difficult.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com
The litmus test for gas prices will become clearer when the EU starts to fill its gas storage for the next winter amid a Chinese economic rebound with its demand for gas and LNG expected to rebound too.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert