Baku:Fitch Ratings anticipates that natural gas prices in Europe will gradually decline in the medium term. This outlook was shared by Jakub Zasada, EMEA Director for Corporate Ratings at Fitch Ratings, during the 'Fitch in Azerbaijan' event.

According to Azeri-Press news agency, Fitch raised its price assumptions for Europe's TTF gas in September due to a reduction in LNG supplies from the Middle East. This adjustment followed the agency's update on its oil and gas price forecasts.

Zasada highlighted the challenges in securing LNG supplies through alternative routes compared to oil shipments. The high costs associated with LNG tankers and insurance difficulties have further complicated transportation. The decrease in LNG shipments from Qatar has resulted in a gas shortfall of approximately 50 million cubic meters in the global market, representing about 10% of global LNG trade prior to recent geopolitical events.

This reduction in supply has intensified competition between European and Asian buyers for available LNG cargoes, leading to increased TTF prices. By the end of September, Europe's gas storage facilities were filled to about 71% capacity, compared to the 80-90% range in previous years.

Fitch suggests that Europe has sufficient gas reserves to balance the market, with a low risk of significant supply disruptions. However, the lower reserves than in previous years have contributed to higher prices and volatility. The agency also expects TTF prices to decline in the future, supported by new LNG production capacities in the United States and Qatar. Zasada warned of a potential oversupply risk in the global gas market towards the end of the decade, considering the LNG projects currently under construction and approved.