Asian spot prices for liquefied natural gas (LNG) rose this week, driven by a surge in oil prices and a potentially colder start to winter and higher heating demand.
The average LNG price for January delivery into northeast Asia was estimated at around $7.40 per million British thermal units (mmBtu), up $1.00 from the previous week, industry sources said.
Brent oil futures, which the majority of Asian LNG contracts are priced against, rose 6% this week to the highest since March as traders were optimistic about oil demand recovering due to developments with various coronavirus vaccines.
Temperatures in Beijing, Shanghai and Seoul are expected to be lower than average over the next two weeks, weather data from Refinitiv Eikon showed, increasing gas demand for heating.
Analysts at consultancy Energy Aspects said heating demand started earlier than usual in northeast Asia this year.
“The onset of early cold weather may have helped an early stockdraw and encouraged Chinese buyers to go back to the market for spot LNG purchases,” they said.