Lower Prices Seen Broadening LNG’s Appeal Later This Decade

The flood of LNG poised to hit the global natural gas market later this decade is widely expected to push prices lower, potentially broadening the super-chilled fuel’s appeal in a way that could stoke more demand and help absorb the projected supply glut.

Global natural gas prices have steadily fallen since Russia invaded Ukraine and sent buyers scrambling to secure supplies after the Kremlin cut off exports to Europe. European natural gas traded at nearly $100/MMBtu at the height of the crisis in August 2022, while Asian liquefied natural gas hit nearly $70 at that time.

Since then, the Title Transfer Facility (TTF) has plummeted nearly 90% and was trading around $11 at the start of July. The Japan-Korea Marker (JKM) has fallen by about 80% and was near $13 at the start of July. Although record high temperatures and geopolitical risks are keeping prices elevated, the market has rebalanced since the supply shock of 2022 and buyers are sitting on more comfortable inventories.