Asia’s LNG prices surge on summer demand

Asia’s liquefied natural gas (LNG) prices surged to their highest level since late December, driven by robust demand from the region’s importers gearing up for summer deliveries.

Traders familiar with the market told Bloomberg that the North Asian benchmark hit approximately $11.5 per million British thermal units (Btu), marking a more than 10 per cent increase over the past week.

Importers in countries like Japan and South Korea have been actively replenishing their gas reserves in anticipation of the summer season in the Northern Hemisphere.

This surge in demand is exacerbating supply constraints caused by disruptions at production facilities in Malaysia and Australia. Moreover, a heatwave across Southeast Asia is further boosting LNG consumption, with even importers in India, where gas plays a minor role in the energy mix, securing shipments.

The duration of this buying spree remains uncertain, given that the spike in prices is making alternative energy sources more attractive in emerging markets. Chinese firms may lean towards cheaper domestic gas options, while Indian industries might favor oil products over LNG.