Europe Outbids Asia for LNG as Prices Surge 150%
Liquefied natural gas prices on the spot market are moving higher as demand picks up seasonally and Asian importers are souring on the fuel. European buyers are stepping up purchases, however, despite the price. They have no choice. Asian demand for liquefied gas is set to decline this month—and over the year—according to analysts. September flows of LNG into Asian countries are estimated at…
Liquefied natural gas (LNG) prices are surging by 150% in the spot market as demand increases seasonally and Asian importers lose interest in the fuel. European buyers, however, are increasing purchases despite the high prices, with no alternatives available to them. Analysts predict that September LNG flows into Asian countries will decrease to 20.09 million tons, down from 22.27 million tons a year ago.
European LNG imports, on the other hand, are expected to rise to 7.98 million tons this month, potentially reaching 10.53 million tons in October, as storage levels of natural gas in the European Union are lower than the five-year average. Qatar's LNG export hub is largely closed, and the UAE's supply is insufficient to replace the lost Qatari gas.
Many hope for new U.S. capacity to come online soon, but this is not guaranteed. Europe is paying a high premium for imported LNG, with LNG spot prices up 150% since February, but has no other options due to Norway's gas imports being at their peak, Russian pipeline gas being restricted by sanctions, and Russian liquefied gas expected to follow in January.
Europe is importing as much LNG as possible, even with the high prices, while Asia is attempting to limit imports by relying on long-term contracts and domestic gas supplies.
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