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October exports of U.S. liquefied natural gas (LNG) hit 7.92 million metric tons for the highest on record since April this year, when exports reached 8.01 million metric tons, Reuters reports, citing LSEG data.
U.S. LNG exports were 7.12 million metric tons in September.
For the first half of 2023, the U.S. ranked the largest LNG exporter in the world, followed by Qatar and Australia, with Europe accounting for 60% of U.S. LNG sales in October.
In 2024, the U.S. is expecting two more LNG export projects to come online that would add some 38 million tons per annum to American export potential. Asian buyers are coming under increasing pressure to avoid U.S. LNG.
This week, Chinese industry sources told Energy Intelligence that Beijing was actively “discouraging” Asian buyers from signing long-term deals for U.S. LNG due to rising tensions between the two global powers. Europe, too, may let up on U.S. LNG volumes in the future, with LNG imports starting to flatten and gas consumption declining.
The uptick in U.S. LNG exports over the past two quarters came as spot LNG prices in Asia fell 3% to around $17.3 per million British thermal units (MMBtu) on Tuesday. In mid-October prices had spiked. The front-month LNG price differential in Asia between December 2023 and January 2024 is now in a state of backwardation, with a discrepancy of $0.84, according to the American Journal of Transportation. Back at home, U.S. natural gas futures surged some 7% on Tuesday, hitting a nine-month higher on predictions of colder weather, leading to greater heating demand for the coming couple of weeks.
Front-month gas futures for December delivery on the New York Mercantile Exchange jumped 22.3 cents, or 6.7%, to settle at $3.575 MMBtu–a level not seen since last January.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com