Since the start of 2024, the gas price has been in an upward trend channel. The risk of supply disruptions and a tight LNG market are the main causes of this. In the short term, the price has rebounded slightly, reflecting a mild start to the heating season and the absence of further escalation in the Middle East. Well-stocked gas reserves – although at a lower level in the Netherlands than in many other European countries – also provide downward price pressure. In the long term, additional global LNG production capacity should provide relief. Through 2028, production capacity is growing rapidly, so supply is likely to start exceeding global gas demand.
Israeli retaliatory action in Iran led to a drop in oil prices, showing that the market considers further escalation less likely. This lowered the risk premium, leaving low growth expectations (especially in China) and growth in non-OPEC+ production to determine pricing. In response to the downward trend channel, OPEC+ has decided to postpone phasing out production cuts by another month, until the end of December. In doing so, it has been forced to choose between two evils; an oil market in oversupply or a loss of market share. With the current decision to postpone the existing production cut, OPEC+ seems to be moving in the middle. Finally, in this Market Update, an analysis on the possible impact of the US elections on European energy security.