Top financial market analysts at NAB Group report that there was minimal fluctuation in liquefied natural gas (LNG) prices during the month of July. The Japan Korea marker stayed within a tight US 55 cent range above US$12/mmbtu, slightly higher than the same period last year.
Anticipated Expansion in LNG Supply
Recent months have witnessed a surge in LNG demand, particularly during the peak summer season in the northern hemisphere. Heatwave conditions in South and South-east Asia have led to increased electricity consumption, driving up the need for LNG. Despite some unexpected supply disruptions, analysts project a growth in LNG supply in the latter half of 2024 and throughout 2025.
Forecasts for LNG spot prices remain steady this month, with an average of US$11.0/mmbtu expected in 2024, gradually decreasing to US$10.5/mmbtu in 2025.
There was relatively little movement in liquefied natural gas (LNG) prices in July, NAB Group commodity analysts note.
LNG supply is expected to expand
“There was relatively little movement in liquefied natural gas (LNG) prices in July – with the Japan Korea marker trading in a US 55 cent range above US$12/mmbtu over the course of the month, marginally above the levels recorded during the same period in 2023.”
“LNG markets have seen strong demand in recent months (compounding peak demand during the northern summer), as heatwave conditions across much of South and South-east Asia bolstered electricity consumption, while LNG supply saw some unanticipated disruptions.”
“LNG supply is expected to expand in the second half of 2024 and across 2025. Our forecasts for LNG spot prices are unchanged this month – we expect prices to average US$11.0/mmbtu in 2024 before edging down to US$10.5/mmbtu in 2025.”
Analysis:
The stability in LNG prices amidst strong demand reflects a balanced market in the energy sector. Investors can anticipate potential growth in LNG supply, which may impact pricing dynamics in the coming years. Consumers should monitor these trends to understand how they could affect energy costs and overall financial planning.