Japan’s liquefied natural gas inventories have dropped to the lowest level in over a year-and-a-half and could push the nation’s utilities to buy more fuel ahead of winter.
Storage held by Japan’s power suppliers fell to 1.62 million tons as of Sept. 17, according to data compiled by the trade ministry. That’s the least since March 2022.
The country’s utilities have already started to stock up on gas ahead of winter with some LNG purchases from the spot market over the last few weeks. Any more prolonged effort to buy additional cargoes would help to tighten the global market and likely send prices higher.
Lingering hot weather has helped drain Japan’s stores of natural gas. The country’s Meteorological Agency forecasts temperatures to be warmer-than-normal across most areas through Oct. 15.
Spot power prices in the nation on Wednesday rose to the highest since February as utilities limit some electricity sales to help conserve gas supplies. Electricity sales volumes dipped 15% on Tuesday from a day earlier, falling well below demand, according to data from the Japan Electric Power Exchange.