Asian spot LNG prices were down 3% to approximately $14.6 per million British thermal unit (MMBtu) on 3 October, as some Asian importers began seeking LNG to prepare for the northern hemisphere’s upcoming peak winter season.

In Europe, prices on the Title Transfer Facility (TTF) fell 16% to approximately $11.6 per MMBtu for the week starting 2 October, with daily prices down between 0.5% and 8% for the six consecutive business days from 25 September.

Asia

Major cities in Japan experienced high temperatures through to the final week of September. Typically, LNG imports tend to drop significantly from August to September as they did by 17% in 2021 and by 15% in 2022.

However, this year, Japan’s LNG imports only fell by about 1.3% to around 5.4 million tonnes for September from 5.5 million tonnes in August.

In the downstream market, major Japanese power utilities reported combined gas storage levels of 1.62 million tonnes on 1 October, up 3.8% week-on-week but down around 20% from the five-year average between 2018 and 2022, according to an update from Japan’s Ministry of Economy, Trade and Industry (METI) on 4 October.

Lower temperatures in Japan during the first week of October led average 24-hour day-ahead power prices to return from recent peak of Yen 19.77 ($0.13) per kilowatt-hour (kWh) on 20 September to approximately Yen 11 per kWh, with day-ahead power transaction volumes falling to approximately 600 gigawatt-hours (GWh).

This is equivalent to volumes transacted in early June, prior to the peak summer demand season, according to data from Japan Electric Power Exchange (JEPX).

In terms of nuclear generation, Kansai Electric’s Mihama unit 3, Takahama Units 1 and 4, and Ooi Unit 3 are currently operating, with Takahama Unit 2 aiming to reach full output later this month.

Unit 3 is scheduled for planned maintenance until January 2024. Kansai Electric’s 1.18 gigawatt (GW) Ooi unit 4 will undergo planned maintenance until late November 2023, according to an update by the company on 2 October.

Europe
In Europe, LNG prices delivered to Northwest Europe fell 4% to approximately $12.4 per MMBtu for the week ending 29 September.

The European Union's gas storage facilities are currently 96% full, marginally exceeding their peak level of 95% seen last winter.

Russian pipeline gas volumes into Europe were down 13% week-on-week to approximately 84.8 million cubic meters per day (MMcmd) on 2 October.

However, this is 16% higher than the 73.2 MMcmd seen on 2 October last year. Norwegian gas flows were up 8% week-on-week at 273.3 MMcmd on 2 October, but down 18% year-on-year.

US
In the US, cooler weather in recent weeks has led to an increase in heating demand, with Henry Hub gas prices increasing 3.7% to $2.949 per MMBtu on 3 October, compared to $2.845 per MMBtu on 26 September.

At Cove Point LNG, feedgas flows are expected to recover shortly following maintenance work to replace a mainline valve planned from 21-29 September.

Feedgas flows to Corpus Christi LNG have recovered to approximately 2 billion cubic feet per day (Bcfd) on 29 September.

US power demand is typically weaker during the current shoulder-month season on reduced cooling demand.

However, this year, weekly power demand increases in recent days have resulted from regional improvement in gas-fired power generation.

The Midcontinent Independent System Operator (MISO) has seen an uptick in gas-fired power generation from 24 September to date.

Meanwhile, gas-fired power generation for Pennsylvania-New Jersey-Maryland Interconnection (PJM) has held firm.

In terms of gas-to-coal switching in US power generation, gas remains favorable compared to coal prices but, with gas prices hovering closer to $3 per MMBtu this month, there could be greater competition from coal in the coming weeks.

While warm days are likely to continue this week, national Cooling Degree Days (CDD) are set to drop, leading to lowered demand in the power sector.

Residential and commercial power demand will likely see gains this week as a cold system passes through the US through the weekend, although this is subject to changes in weather.