Even as a massive LNG supply glut promises lower prices, emerging Asian markets lack the physical capacity to absorb it. A severe shortage of regasification terminals, storage, and gas-fired power plants creates a hard ceiling on demand growth, meaning cheap gas alone is not enough to clear the market.

With over half of new global LNG supply coming from the US, an impending oversupply will force US export facilities to operate at significantly lower utilization rates. This transforms the US from a simple high-growth exporter into a flexible, market-balancing swing producer, a role it was not designed for.

The European Union's phase-out of Russian gas is not absolute. Legacy pipeline contracts to Hungary and Slovakia are expected to be exempt. Furthermore, the anticipated loss of Russian LNG supply is projected to be fully absorbed by new global LNG capacity, resulting in a muted impact on prices.

Despite healthy global oil demand, J.P. Morgan maintains a bearish outlook because supply is forecast to expand at three times the rate of demand. This oversupply creates such a large market imbalance that prices must fall to enforce production cuts and rebalance the market.

Global natural gas markets are currently disconnected. Extreme cold in Europe is driving prices up nearly 30% and draining historically low storage. Simultaneously, moderate weather in the U.S. and warmer conditions in Asia are keeping prices there subdued, showcasing how localized weather can override global supply trends.

Bearish forecasts for an oil surplus are wrong because they ignore seasonal demand within OPEC+ nations. Production increases will be consumed domestically for power generation during Ramadan, the Hajj pilgrimage, and summer cooling, preventing them from reaching the global market.

The rise of destination-flexible U.S. LNG is fundamentally altering global gas markets. By acting as the marginal supplier and an effective 'global storage hub,' the U.S. reduces Europe's strategic need for high storage levels, leading to structurally lower prices and a new market equilibrium.

The UK gas market (NBP) differs structurally from mainland Europe's (TTF) due to its minimal storage capacity—1.7 BCM versus Germany's 23 BCM. This forces the UK to effectively use the European market as its storage, which creates a price differential and makes its market closely linked to and dependent on the continent.

The market is pricing a significantly larger risk premium into Brent crude oil compared to natural gas. Analysts believe potential disruptions from U.S.-Iran talks would primarily impact Iranian oil exports, rather than cause wider disruptions to LNG flows through the Strait of Hormuz, which would affect gas prices.