LNG market poised ahead of winter

Prices hit record levels recently, well in advance of the winter demand peak, but the outlook for the market is mixed

LNG prices have been buoyed over the past year by rebounding global LNG demand—led by Asia-Pacific countries, especially China—in combination with significant constraints in production, particularly in the Atlantic basin. Europe was unable to rebuild its gas stocks and is going into the winter with significant shortfalls in reserves. Drought caused Brazil—and to a lesser extent Argentina—to raise imports, further fuelling the competition for cargoes. Returning capacity may be about to ease this tight supply-demand dynamic, but it could also be exacerbated by a severe winter. China imported 59.5mn t of LNG over the first nine months of 2021—around 22pc, or just over 13mn t, more than over the