Bloomberg reports that the International Energy Agency (IEA) expects global LNG production to rise by 7% next year — the largest increase since 2019 — driven mainly by new U.S. facilities nearing completion.

At the same time, Bloomberg noted that demand from China — the world’s top LNG importer — is softening. A new gas supply agreement with Russia is expected to curb the country’s reliance on LNG imports, while rising domestic production is set to further reduce its gas needs.

However, Michael Sabel, CEO of Venture Global LNG, the second-largest U.S. exporter, cautioned that despite the recent agreement between Russia and China, Beijing’s appetite for U.S. LNG will continue to remain strong.

Furthermore, according to Sabel, quoted by Reuters, “Europe is extremely short of electricity production capacity,” adding that “data centres are going to be a massive source of new incremental demand.”

Several analysts interviewed by Bloomberg agree that Europe will continue to compete with Asia in the global LNG market to meet its storage targets ahead of the cold season. However, they expect prices to ease afterward, with a substantial LNG surplus projected to emerge in the second half of 2026 and expand further through 2027.

In this context, Morgan Stanley forecasts that gas prices in both Europe and Asia could fall to as low as $10 per million BTU by the fourth quarter of 2026, compared with an average of $14 per million BTU last winter. By 2027, BNP Paribas projects prices could decline further, reaching as low as $8 per million BTU.