Liquefied natural gas flows from the Persian Gulf are still over 75% lower than they were before February 28th. Yet heating demand is rising ahead of winter. In Europe, the November natural gas benchmark contract is trading at over 81 euros per MWh. In Asia, the spot market LNG price topped prices for Europe, drawing cargoes eastward.
Meanwhile, coal is 80% cheaper than LNG. Coal has been the target of much climate-related regulation on the basis that it emits the most carbon dioxide plus pollutant gases and particulate matter. Yet coal has remained…
LNG Market Background
The global LNG market has undergone a structural transformation in recent years, with U.S. exports reshaping trade flows and providing consuming nations with greater supply optionality. European buyers have accelerated long-term LNG contracting following the disruption of Russian pipeline gas supplies.
New LNG liquefaction capacity — from the U.S. Gulf Coast, Qatar's North Field expansion, and Australian projects — is expected to add significant supply volumes through the late 2020s, with implications for long-term contract pricing and spot market dynamics.
What to Watch
Stakeholders will be tracking spot LNG cargo pricing in Asian and European markets, liquefaction plant utilization rates, and upcoming long-term supply contract negotiations as global LNG trade flows continue to evolve.
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