Japanese utilities are boosting their inventories of LNG ahead of the peak summer demand season, as power demand has been weaker in recent weeks.
The LNG stocks held by Japan’s utilities are already higher compared to the same time last year, according to government data cited by Argus.
The LNG inventories increased by 4.6% on June 1 from a week earlier, a survey by Japan’s trade and industry ministry showed. This week, Japan’s LNG stocks at utilities are 1.3% above the volume from the same week last year and 7.6% higher compared to the 2020-2024 average for the end of June.
Apart from utilities stockpiling LNG in preparation for peak summer power demand, the stocks have been higher due to the weaker electricity demand in the spring.
Comfortable inventories in Asia is good news for Europe’s efforts to fill its gas storage levels ahead of the next winter.
For most of the past winter, European benchmark gas prices were higher than Asian spot LNG prices for delivery into north Asia, attracting more cargoes to European import terminals. Additionally, LNG demand in China and the rest of Asia has been tepid at best, which has helped Europe as competition for cargoes hasn’t been as fierce as in previous years.
Traders and analysts will be watching closely the pace of Europe’s storage refills in the coming months, as well as LNG demand in Asia and whether North Asian demand would rise and potentially compete for spot cargoes with Europe.
Demand for liquefied natural gas from the biggest importing region—Asia—has remained strong this year, although it has experienced a certain softening compared to last year. Higher prices are to blame for the softening.
China had comfortable levels of gas in stock and a trade beef with the U.S., so its LNG imports over the first quarter of 2025 fell to the lowest in five years. A mild winter helped as well.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
- Venezuela Defies U.S. Sanctions as Oil Exports Hold Steady
- Upstream Spending and Production Holds Steady in Canada
- Trump Administration to Roll Back Biden’s Curbs on Alaska Oil Drilling
