LNG prices are expected to return to record highs quicker than previously anticipated as buyers continue replenishing depleted stocks amid surging power demand and ahead of the Northern Hemisphere winter, analysts said. LNG prices tumbled to record lows of less than $2 per MMBtu in February 2020 due to the COVID-19 pandemic. However, the prices lurched to all-time highs of $56 per MMBtu within 18 months as supply could not keep up with the pace of the post-pandemic demand recovery.
While inventories in China, Japan, and South Korea are at comfortable levels, Analysts said a cold snap would result in a buying spree. This means that prices will likely stay at elevated levels, bad news for European buyers, whose inventories are trailing behind the five-year average. Many parts of Northwest Europe, as well as Beijing and Seoul, are expected to experience colder weather in the coming weeks, which will likely boost demand for home heating.
