What Chevron’s CEO is saying about future LNG supply and demand

Chevron is forecasting steady global growth in LNG demand but warns the market could face lower prices later this decade as a wave of new supply comes online, Bloomberg writes. 

CEO Mike Wirth says the company expects “linear” increases in LNG consumption worldwide, driven by energy transition needs and rising demand in Asia. But major export capacity additions—especially from the U.S. Gulf Coast and the Middle East—are poised to outpace demand growth toward the end of the 2020s.

Wirth says the imbalance will likely pressure LNG spot prices as the market digests the new volumes. “There’s a period of time when it would appear we’re going to see more supply coming into the market than demand will be able to absorb,” he says, noting that oversupply will almost certainly translate into weaker pricing. The outlook underscores growing competition among LNG producers as global build-out accelerates.

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