Prices for liquefied natural gas continue to rise due to the heat

By Alimat Aliyeva

The severe heat wave this summer is leading to a noticeable increase in prices for liquefied natural gas (LNG) in Asian countries. In mid-June, it reached $12.6 per 1 million BTU (British Thermal Unit, British thermal unit) on the spot market, Azernews reports.

This is about 1.5 times more than in early March and the highest level since December 2023. In early July, the price in Asian markets fluctuated at about the same level, just below $ 12.5 per 1 million BTU. In the European Union, Nikkei notes, LNG prices were also the highest since December 2023.

"The main factor in their growth," the newspaper notes, "is the intense heat. In China, the world's largest LNG buyer, temperatures rose this spring to the highest levels since 1961. In Japan, which ranks second in the world in LNG purchases, temperatures this summer will also be noticeably above average, the Nikkei warns.

This leads to an increase in demand for LNG, as the heat requires large amounts of electricity for air conditioning and refrigeration units. According to the International Energy Agency, in 2024, the consumption of liquefied natural gas in the countries of the Asia-Pacific region will increase by 12% compared to the level of 2020 and will amount to 937 billion cubic meters, which is about 20% of global consumption. The growing demand for LNG in Asia is pulling up its prices on a global scale, the newspaper states.