Asia is on track to import this month the highest level of LNG since January as demand grows despite rising spot LNG prices in the region.
Asia’s LNG imports are expected to stand at 24.85 million metric tons in July, the highest level in six months, and higher than the June imports, although prices have increased in recent months, per data compiled by Kpler and cited by Reuters columnist Clyde Russell.
China and India are expected to see higher LNG imports in July compared to June, although Indian purchases tend to be much more price-sensitive than China’s and buyers tend to stay on the sidelines of the spot market when LNG prices rise.
However, the current spot price in Asia is in a kind of ‘Goldilocks’ range – higher than European prices and high enough to attract cargoes to Asia instead of Europe, but not as high as to discourage buyers, according to Reuters’ Russell.
While Asian imports are set for a six-month high in July, imports into Europe are on track to be at the lowest levels since September 2021, according to the Kpler data.
Higher prices in Asia are drawing more imports into the region, while demand in Europe is muted and prices are lower than Asian levels.
Europe is fairly comfortable with its gas supply at this time of the year, although LNG and gas pipeline outages in Norway have resulted in sporadic price hikes in the European benchmark in the late spring.
By the end of the decade, global LNG demand is set to surge by about 35%, led by growth in Asia, ING strategists said earlier this month.
Europe’s overall gas demand is in a structural decline and the strong demand from Europe in recent years will ease by the end of the decade, also due to the EU’s energy transition goals, they added.
By Charles Kennedy for Oilprice.com
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