Why Isn’t Winter Pushing LNG Prices Higher?

Spot LNG prices in Asia-Pacific are hovering around the $6/MMBtu level at a time when seasonal winter demand usually pushes them higher. The reason is not hard to see – excess liquefaction capacity coming on-stream in the US, compounding the build-up of capacity in recent years in Australia, as well as additions in Russia and elsewhere. There is also a year-round seasonal impact. A mild winter generally gives way to weak summer pricing and a certain amount of residual LNG in tank. Buyers can fill up cheaply and enter the next winter season…