Three trades for liquefied natural gas cargoes executed by commodity trading major Vitol made the company the talk of the LNG town as it pushed the Asian regional LNG benchmark up by as much as 20 percent.

Bloomberg reports that the deals included one purchase of an LNG cargo from PetroChina, one from Gunvor, and one from Trafigura. The prices, at which Vitol bought the commodity between Friday and Tuesday, varied from $6.62 per mmBtu for the first cargo to $6.87 per mmBtu for the third one. Following these trades, the Japan-Korea Marker benchmark surged 20 percent to $6.761 per mmBtu—the year’s high.

LNG prices have received much-needed support recently, mainly from weather forecasts expecting a cold winter in the northern hemisphere and specifically in Asia. If the forecasts materialize, they will provide a vital boost to LNG trade as producers and exporters struggle with an oversupplied market that started well before the pandemic.

An excess in the supply of LNG globally had pushed benchmark prices for the commodity lower when the coronavirus emerged. Then they fell further, following the path of oil. LNG fell as low as $2 per mmBtu earlier this year, making a lot of production unprofitable. At the same time, demand slumped, too, leading to cargo cancellations, notably of U.S. shipments.

As summer ended and autumn began, LNG prices began to improve. Earlier this month, Reuters’ Clyde Russell reported the average price per million British thermal units of LNG for delivery to Northeastern Asia stood at $5.50, and cargoes for December delivery traded at a $0.20 premium to those for November delivery.

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Analysts from Refinitiv expect that global LNG demand will jump by 4 billion cu m this winter, to be led, unsurprisingly, by a pickup in consumption in China, Japan, and South Asia.

By Irina Slav for Oilprice.com

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