While oil has been transformed during the past 30 years into a vibrantly traded global commodity, natural gas trading remains fragmented with prices in all regions but the US mirroring the oil price.
But that is all about to change, says the International Energy Agency. The looming surplus in gas supply is set to put pressure on the current market structure, helping gas to break from crude oil and trade independently.
In an unauthorised draft version of its flagship World Energy Outlook report, the rich countries' watchdog says: “The prospect of a large glut in gas supplies persisting to at least the middle of the 2010s could have a profound impact on gas-pricing mechanisms.” The changes “will be inevitably slow”, but over time the formal link between oil and gas prices could weaken in continental Europe and Asia-Pacific, bringing them closer to North America, where gas trades independently.