Weather forecasters are predicting a harsh winter for Asia, and while this would hardly be good news for anyone in the region, it happens to be great news for LNG exporters.

Producers of liquefied natural gas were hammered no less mercilessly by the coronavirus pandemic than their oil-producing peers. On top of that, the LNG market was already oversupplied—just like the oil market—when the coronavirus began its global march. As a result, prices for the so-called bridge fuel slumped to about $2 per million British thermal units, making a lot of LNG non-competitive and leading to delays in several final investment decisions in the United States.

While the FIDs are unlikely to be revisited anytime soon, spot prices are improving. The Nikkei Asian Review reported last week the price for LNG had hit $5.20 per mmBtu, which was nearly triply the price of the commodity this spring when the glut and the pandemic combined to drive it down. It is still short of the average of $6 per mmBtu, at which LNG traded a year ago, the daily noted.

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Source: Oil Price