Expert Commentary - Impact of COVID-19 on U.S. Gas Demand and LNG Exports
The novel coronavirus (COVID-19), which was originated in Wuhan, China at the end of 2019, has become a global pandemic spreading across all regions and to more than 200 countries globally. At the end of April 27, 2020, there were around 3.06 million reported cases and more than 210,000 COVID related deaths globally. The epicentre of the virus shifted from China to Europe (Italy, Spain, France and Germany) and now to the U.S.
The U.S., which is the world’s third populated country, has seen its cases grown exponentially from mid-March 2020 to almost 1 million cases by April 27, 2020. New York is the most impacted U.S. state with around 300,000 cases, more than any country in the world. In terms of deaths, the U.S. also has the highest number of COVID related deaths (more than 55,000) globally. The country currently accounts for around 32% of the global COVID cases and 26% of global COVID related deaths.
Countries across the globe have taken drastic measures such as curfews, lockdowns, shutting of non-essential businesses and closure of borders to curb the spread of the infectious virus. These measures have negatively affected energy demand and economic growth due to the closure of schools, businesses, some industrial plants and lower transportation activity. Gas plays a significant role in the U.S. primary energy mix, with a share of ~31%, and a negative impact of COVID on energy demand is expected to drag gas demand downwards.
This report is aimed at analysing the impact of COVID on U.S. natural gas demand and their LNG exports as well as the implication on the global gas and LNG markets.