Global supply crunch sends Asian gas prices to five-month high

Global supply crunch sends Asian gas prices to five-month high
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(Aug 16): Asian liquefied natural gas prices extended a rally to the highest level in five months as a global supply crunch shows no signs of easing.

The Asian benchmark spot LNG price jumped above US$52 per million British thermal units on Monday, the highest level since early March when Russia’s invasion of Ukraine upended energy markets.

Asian buyers are moving to procure supply for winter. Jera Co, Japan’s top LNG importer, purchased a number of spot shipments for delivery this winter via a tender late last week, according to traders with knowledge of the matter.

There isn’t enough available LNG to cool off the breakneck rally in Asian prices, which are trading nearly three times higher than this time last year. Utilities around the world are competing for shipments for delivery this winter amid supply disruptions from Russia to the US.

Shell Plc’s Prelude floating LNG production facility in Australia is slated to remain offline into next month due to an ongoing strike. Workers extended industrial action at the plant until at least Sept 1.

European gas prices also rallied to the highest level since March on Monday. Competition between Europe and Asia for a shrinking pool of LNG is intensifying, boosting prices for the fuel in both regions.