Abstract
Research background: Natural gas markets are facing an ongoing process of diffusion of natural gas liquefaction (LNG) technology. High mobility and relative ease of LNG use predetermine a huge potential for globalization of gas markets and the formation of a single price space similar to the oil world market. Purpose of the article: The purpose of the article is determining the degree of gas markets convergence and offering an assessment of the prospects for gas globalization. Methods: The authors conducted a comparative analysis of statistics on historical prices in the gas markets, reviewed the scientific and practice-oriented literature on this topic. The authors developed a brief forecast model based on statistical methods to develop their own assessment of the prospects for the development of a single global gas market. Findings & Value added: The paper contains the most relevant comparative assessments of the three key gas markets (Europe, Asia, USA) and descripts an authors’ assessment of the potential for the emergence of a global gas market. On the one hand, the authors revealed a fairly high correlation between LNG prices worldwide, on the other hand, LNG supplies are not the only form of gas supplies. In addition, regional pricing features lead to the relative independence of the three markets among themselves. Moreover, the current global crisis may slow down the development of global gas market due to restrictions on the profitability of potentially new LNG projects.
Highlights
Natural gas is one of the most important components of energy consumption worldwide, along with oil and coal
Natural gas trade is often compared with oil trade, as evidenced by a number of researchers who have found long-term cointegration between oil and natural gas prices [1]
Why is this happening? Oil and natural gas are, first, the energy resources required by all countries in the world; secondly, both resources are actively becoming the subject of trading on exchanges, specific financial instruments are developed
Summary
Natural gas is one of the most important components of energy consumption worldwide, along with oil and coal. Natural gas trade is often compared with oil trade, as evidenced by a number of researchers who have found long-term cointegration between oil and natural gas prices [1]. Oil and natural gas are, first, the energy resources required by all countries in the world; secondly, both resources are actively becoming the subject of trading on exchanges, specific financial instruments are developed. There are prerequisites to believe that both of these resources are not equal in their globality These prerequisites are that: 1) world trade requires cheap and mobile delivery of goods anywhere in the world. The aim of the article is to answer the question: "What is the current level of integration of natural gas markets and what are the prospects for this process?"
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