Asian LNG spot prices rise on increased AC power consumption

LNG spot prices in Asia rose on strong demand for the power generation fuel as warmer than usual summers in different parts of the world increased electricity use for air conditioning.

The average price of LNG shipped to Northeast Asia in August is expected to be about $12.50 per million British thermal units (mmBtu), up $0.80 from the previous week, according to industry sources.

According to weather data from Refinitiv Eikon, above-average temperatures are expected in Beijing, Tokyo, Seoul and Shanghai over the next two weeks, which could reduce inventories and increase demand for cooling gas.

In the U.S., forecasts for warmer weather in the next two weeks also pushed natural gas futures to a 29-month high at a time when U.S. gas reserves are lower than expected and exports are growing.

European gas reserves are below the average of the past five years, increasing the need to replenish stocks.

A London trader said increased use of air conditioners and reduced inventories have pushed prices higher.

Supply-side disruptions have also tightened the market. Russian producer Sakhalin Energy (Sakhalin Energy) said it plans to shut down production for about a month from July to carry out maintenance.

Malaysia's Petronas (Petronas) to sell a batch of PFLNG Dua for delivery in August at around $ 12.