The super El Niño is expected to raise the winter temperatures in South Korea, Japan, and parts of China, potentially easing the gas supply needs in these key Asian LNG importers and leaving more cargoes for Europe, which struggles to fill its gas storage sites to adequate levels for this time of year.
The record El Niño weather pattern in the Pacific is expected to bring warmer winter weather in Japan, South Korea, Vietnam, Taiwan, Thailand, and parts of China, Bloomberg reports, citing major weather models for the coming winter.
A potential easing of gas demand in Asia could be welcome news in Europe, where gas storage sites are only 73% full as of the start of this week, compared to more than 86% for this time of year for the previous five years.
Current forecasts also suggest a slightly warmer winter in Europe, at least through January 2027, which could ease the strain on Asian and European LNG import needs at a time when supply from Qatar remains severely disrupted by the closure of the Strait of Hormuz.
Unlike crude oil, LNG shipments at the chokepoint haven’t materially recovered, also due to technical constraints to shuttle-shipping the gas and carrying out ship-to-ship (STS) transfers off Oman outside the Strait of Hormuz.
Cold snaps in East Asia are likely in February, according to most current models and analysts cited by Bloomberg.
Despite the currently favorable weather forecast for the coming winter, gas supply and prices in both Europe and Asia remain at the mercy of developments in the conflict in the Middle East.
Prolonged supply disruptions this winter will further hike spot Asian LNG prices and Europe’s benchmark natural gas prices to new highs, as competition for the readily available spot supply is intensifying.
Early this week, Europe’s natural gas prices at the Dutch TTF hub surged to the highest level since early 2023 as gas volumes in storage sites sit at their lowest since at least 2011.
By Michael Kern for Oilprice.com
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