Persisting heatwaves across Asia are significantly boosting gas demand, particularly in Japan and South Korea, as power prices surge in response to sweltering temperatures and ongoing maintenance at key nuclear plants. In contrast, European gas prices are experiencing a dip, while the U.S. maintains strong gas production and a steady supply to LNG terminals.
Asian spot liquefied natural gas (LNG) prices for October, the new trading month, were around US$14.4 per million British thermal units (MMBtu) on 20 August, with November derivatives trading 2.6% lower at approximately US$14.2 per MMBtu. Meanwhile, Europe’s Title Transfer Facility (TTF) for September was at US$12.4 per MMBtu, reflecting a 3.9% drop from the previous week.
The Japan Meteorological Agency and Korea Meteorological Administration are forecasting above-average temperatures through the end of August and early September, keeping regional gas consumption robust despite recent typhoons causing isolated power outages in Japan. Major utilities in Japan reported combined LNG storage levels of 1.92 million tonnes (Mt) for 18 August, a 3% week-on-week decrease but still higher than levels seen at this time last year.
In the U.S., gas production remains healthy, with feedgas levels to LNG projects averaging around 12.9 billion cubic feet per day (Bcfd) from 14 to 20 August. This has been slightly higher than the previous week, with the Sabine Pass and Freeport LNG facilities showing strong recovery and stability in their operations.
As Asia braces for continued high temperatures, the risk of price volatility remains due to ongoing geopolitical tensions in Europe and the Middle East. However, European gas prices are trending downward, with October LNG delivery to Northwest Europe trading at US$12.4 per MMBtu on 20 August, down from earlier in the month. Norwegian pipeline flows to Europe have decreased slightly, while Russian flows have ticked up but remain lower than the same period last year.
In South America, LNG demand remains muted as Brazil benefits from long-term contract volumes and sufficient hydropower generation, while neighboring countries see declining needs as winter draws to a close in the Southern Hemisphere.
