Unusually cold and windless weather in Europe is draining gas inventories and boosting demand for seaborne LNG shipments, with some traders diverting supply away from Asia. Some buyers in Asia, like those in India and China, are curbing spot LNG purchases because shipments are too costly and alternative fuels are more attractive.
Despite the rise in Asian LNG prices, it still makes more economic sense for US shipments to favour Europe, traders said. Weekly LNG deliveries to Europe are expected to hit the highest level since February next week, according to ship-tracking data compiled by Kpler.
Meanwhile, China — the world’s top LNG importer — isn’t in dire need of additional supply because of brimming inventories in some parts of the country, traders said. That means that the country likely won’t dip back into the spot market unless winter weather turns significantly colder, they added.
