Oil and Gas in the Capitals ///
The outlook for the European gas market is changing quickly. The conventional demand outlook was that, because of diminishing domestic output and rising consumption, Europe would be forced to increase imports and consequently lose leverage with a limited number of suppliers, with an upside price risk. With more emphasis on energy conservation, renewable energy and eventually nuclear power, Europe’s gas import needs might be much more moderate than, until recently, anticipated. As for supplies, worries about scarcity dissipate as the availability of seaborne supplies is realized, and especially as the potential for shale gas dawns. Moreover, new pipeline supplies seem to be available from the Caspian region and even Central Asia. The diversification enhances supply security and strengthens the buyers’ bargaining position, leading to a downside price risk for producers.
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