LNG

Gas prices at Europe’s benchmark TTF trading hub have hit four-year highs, tilting JKM-TTF spreads in favour of LNG deliveries to Asia. The TTF Dec26 contract increased markedly, according to Spark Commodities data, beginning to affect the arbitrage economics for US LNG.

European households and industries face at least another year of high gas prices as inventories sit nearly 15% below normal filling levels for October, leaving the EU dependent on scarce LNG cargoes and facing a costly refill campaign next summer.

China’s National Energy Administration (NEA) has urged state LNG buyers – CNOOC, CNPC, Sinopec and PetroChina – to stop LNG resales through the remainder of 2026 and into early 2027, as Beijing seeks to strengthen domestic gas availability during the winter heating season.

The arbitrage for U.S. LNG cargoes is now favouring deliveries to Europe over northeast Asia, according to Spark Commodities, as shipping costs and regional price spreads render Atlantic-to-Pacific deliveries uneconomic for the remainder of 2026.

European gas buyers are starting to outbid Asia for LNG cargoes to refill storage ahead of winter, marking a decisive shift in the global gas arbitrage, said Menelaos Ydreos, secretary general of the International Gas Union (IGU).

European gas prices at the Dutch TTF may need to top €100/MWh to attract enough flexible US LNG cargoes to refill storages ahead of the winter, Goldman Sachs analysts said.

With risks to ship LNG cargoes through the Strait of Hormuz likely to persist into the upcoming winter, Argus’ TTF front-month price assessment was last seen not far off €64/MWh, its highest level since January 2023.

Europe is regaining some pull in the global LNG market with Kpler tracking six Atlantic Basin cargoes redirected to the bloc, versus two moving away – a sharp reversal from June when 13 cargoes were rerouted from Europe to Asia.

Asia’s LNG imports are set to hit a six-month high in July, while Europe’s imports are expected to fall to their lowest level in nearly two years. Asia is projected to take 23.05 million metric tons of LNG this month, up from 22.60 million tons in June, while Europe is forecast at 6.56 million tons, down from 7.21 million tons in June, according to Reuters and Kpler data.

Europe's LNG intake fell about 16 percent in June, and reporting has placed the decline on lower US deliveries. The vessel record complicates that reading. US terminals loaded 151 cargoes in June, level with the 149 of May and above the 2025 monthly average of 136. Loadings did not fall. What changed was where the gas went.