Liquefied natural gas buyers in North Asia are pausing plans to procure additional fuel for winter after the conflict between Israel and Hamas compounded supply risks, boosting global prices.
Following a jump in European prices, Asian spot LNG shipments are being offered in the range of the high-$10s per million British thermal units, according to traders. That is the highest price in about eight months.
Prices have rallied as the Israel-Hamas war threatens to embroil the Middle East, home to major gas exporters and trade chokepoints. Meanwhile, the market is monitoring discussions between Chevron Corp. and Australian worker unions to avoid LNG strikes that are set to begin next week.
Read More: Fear Grips Global Gas Market Facing Winter Supply Threats
LNG buyers in Asia are waiting for prices to fall before they book more shipments for winter, when demand for the heating fuel peaks, as they are currently sitting on comfortable inventories, traders said. The run-up in prices reflects supply concerns that may not materialize, and don’t reflect a jump in buying, they added.
Japan has already purchased a significant volume of LNG, while South Korea had postponed shipments for earlier in the year into winter, said Masa Odaka, a gas and LNG markets analyst at Rystad Energy. There is always a chance that a cold winter could lift demand, but importers seem prepared for the start of the heating season, he said.
Other spot market news:
- A unit of Cnooc sold an LNG cargo for Dec. 20-22 loading from the North West Shelf LNG export project in Australia
Buy tenders:
