Global LNG prices could spike this winter on low European gas stocks

• European gas stocks currently at 67% full, a record low for this time of year, with Norway's Equinor projecting only 75% by November 1 versus the EU's 80% December target
• Asia's spot LNG prices have already tripled to nearly $30/MMBtu this year; Wood Mackenzie warns prices could reach $40/MMBtu (equivalent to $240/barrel oil) in a cold winter scenario
• Strait of Hormuz closure has cut 36 million metric tons of annual supply, with executives warning the constraint will likely persist through year-end and force demand destruction at peak prices

Global LNG Prices Face Potential Winter Spike on Supply Concerns

Global liquefied natural gas (LNG) prices could surge this winter as Europe faces critically low storage levels and supply disruptions through the Strait of Hormuz continue, industry executives warned at the Gastech conference in Bangkok.

Key Figures:

• European Union gas stocks currently stand at 67% full, a record low for this time of year, well below the EU's 80% capacity target by December
• Norwegian energy major Equinor projects stocks may only reach 75% by November 1
• Asia's spot LNG prices have nearly tripled to approximately $30 per million British thermal units (MMBtu), up from pre-war levels of around $10/MMBtu
• Wood Mackenzie warns prices could spike to $40/MMBtu during a cold winter, equivalent to $240 per barrel for Brent crude
• Closure of the Strait of Hormuz has eliminated 36 million metric tons of supply this year, preventing shipments from Qatar and UAE

Market Implications:

Unlike the 2022 Ukraine crisis, European countries failed to build adequate stockpiles during summer due to lack of financial incentives in a backwardated market. This leaves Europe vulnerable to winter demand pressures.

Asia and Europe will likely compete for US LNG supplies during cold weather, though the 45-day shipping journey to North Asia presents logistical challenges for rapid deployment.

Companies Mentioned:

Shell, Equinor, Cheniere Energy, ExxonMobil, Germany's SEFE, and Wood Mackenzie all expressed concerns about winter supply adequacy.

Executives emphasized that actual price movements depend heavily on winter weather severity, with continued Strait of Hormuz constraints expected through year-end.