Natural Gas on the Energy Market in 2006
An overview of the global situation
In 2006 the International oil markets were again influenced by important factors. With oil still in short supply and only very small reserve capacities, the international oil markets were characterized by a continuing strong demand, particularly from the USA and from the emerging countries such as China, India and Brazil. In addition, markets were affected by political unrest in Nigeria, the ongoing debates about the Iranian nuclear program, as well as by the continuing unstable situation in the Middle East.
These factors were reflected in 2006 by further sharp rises in oil prices and Brent crude oil set a new record on the international markets. At approximately US $ 65 per barrel, prices were roughly one fifth up on the US $ 54 price of the previous record year 2005. However, oil prices went through considerable fluctuations over the course of the year: at the beginning of August, the daily prices for Brent crude hit a new record of just under US $ 80 a barrel as opposed to the US $ 55 price a barrel at the end of 2005 . The easing of tension in the Middle East and the comparatively mild weather in the last few months of 2006 naturally led to a sharp fall in prices. At the end of 2006, the almost US $ 60 per barrel price of Brent crude was well below the record price and even below the 65-dollar price at the beginning of the year.
In 2006, approximately 2,700 billion m³ of gas was produced and consumed which was roughly the equivalent of 2.4 billion tons of oil. This meant a slight increase compared to the figures of the previous year. Approximately 30 percent of this, (i.e. 820 billion m³), was traded across borders between producing and importing countries for the consumer markets. The focus of this international trade was again within individual regions such as Europe, North America or Far East/Pacific Rim just as in 2005 but it became increasingly interregional in 2006. That is, roughly forty percent of cross-border deliveries occurred between different regions in 2006. In comparison with the 2005 figures, pipeline deliveries only rose negligibly to about 590 billion m³. Approx. 230 billion m³ was delivered across borders as LNG (Liquefied Natural Gas), 9 percent more than in 2005. Thus the share of LNG deliveries in the total international gas trade increased to 28 percent (2005: 26 percent).
Still being the largest gas exporter, Russia delivered closely one fourth of the total worldwide gas transports in 2006, followed by Canada, with 13 %, Norway, with 9 % and several other countries. Amongst the importing countries the USA was the largest with 16 % of the total, followed by Germany and Japan, with 11 % each, then by Italy (8 %) and France (6%).
Proved recoverable gas reserves in the world were estimated at around 175,000 billion m³ at the end of 2006. These estimates were roughly 1 percent higher than in the previous year, which was mainly due to a higher valuation of the reserves in the CIS countries (Kazakhstan and Turkmenistan) as well as in China. Russia accounted for 27 percent of the proved recoverable world gas reserves, while Iran for 16 percent and Qatar for 15 percent. Therefore, the three by far largest reserve countries together had approx. 58 percent of the proved recoverable world gas reserves. By contrast, Europe’s share is still only about 3 percent.