Oslo: The East Asian liquefied natural gas (LNG) price for October delivery experienced a slight increase of 0.4 per cent week-on-week, reaching US$20.4 per million British thermal units (MMBtu) on August 3. This rise is attributed to ongoing geopolitical risks and extreme heat, which continue to support spot demand.

According to BERNAMA News Agency, Rystad Energy's Gas and LNG Market Update report highlighted an expansion in buying interest despite prices hovering around the US$20 per MMBtu mark. Bangladesh is actively seeking three cargoes for August following the reactivation of the Excellence LNG floating storage and regasification unit (FSRU), which was previously shut down due to a fire in mid-July. Other countries such as India, Thailand, and Taiwan (China) are also participating in the market.

Rystad Energy, an independent energy research and business intelligence company based in Oslo, Norway, reported that Japan and South Korea face a 60 to 70 per cent probability of experiencing above-average temperatures in August. This scenario raises the possibility of faster inventory depletion and increased near-term procurement needs. In Japan, the restart of Chugoku Electric's 820-megawatt Shimane 2 nuclear reactor has been postponed from August 6 to August 19. The extended outage is likely to increase reliance on gas-fired generation during the heatwave, potentially raising utilities' LNG requirements.

Meanwhile, in southern China, heavy rainfall following a typhoon in Guangdong province has resulted in lower temperatures and increased hydropower output. This development is expected to reduce cooling demand and limit gas-fired generation, thus easing the broader regional tightening.

Antonia Syn, Rystad Energy analyst for Gas and LNG Research, noted that gas markets are currently being influenced by a tug-of-war between weather-driven demand and escalating geopolitical risks. She commented on the situation, stating, "While President Donald Trump has shelved planned strikes on Iran in favour of renewed diplomatic efforts, last week's attack on LNG carrier Gas Log Shanghai and a drone strike on Egypt's Damietta LNG export terminal demonstrate how quickly supply risks can materialise. With Iran denying that talks with the US are underway, markets are unlikely to gain much confidence, leaving sentiment highly sensitive to further geopolitical developments."

The report also indicated that the disruption in Egypt has reduced the country's direct LNG import nameplate capacity to approximately 1.4 million tonnes per month, below its July LNG imports of nearly 1.6 million tonnes. This limits its regasification capacity and flexibility at a time when LNG imports are crucial for meeting summer gas demand.

In the United States, Henry Hub prices remained largely stable over the past week, with a slight increase of 0.3 per cent to US$2.77 per MMBtu on August 3. This stability was attributed to hotter weather and rising power-sector demand, which offset strong supply and weaker LNG feedgas consumption.