Asian spot liquefied natural gas (LNG) prices gained for a third consecutive week to hit a new high for the year so far as colder weather in the region drove demand.

The average LNG price for January delivery into northeast Asia LNG-AS was at $15.10 per million British thermal units (mmBtu), up 3.4% from the previous week, industry sources estimated.

“Heating demand is set to be particularly strong in Japan, with forecasts for daily minimum temperatures in Tokyo suggesting a prolonged period of colder weather into the start of the new calendar year,” said Samuel Good, head of LNG pricing at commodity pricing agency Argus.

LNG inventories held by major Japanese electric utilities were at 2.06 million metric tons as of Nov. 24, down from 2.16 million metric tons during the corresponding period of last year and the five-year average of 2.13 million metric tons.

While Beijing is forecast for a mild spell over the coming days, temperatures are set to dip below seasonal norms in the second half of December, said Good.

“But forecasts for Seoul suggest a sustained patch of mild weather, which could substantially limit heating demand through the mid-winter period.”

Stronger demand in the region has led some LNG vessels initially heading for Europe to divert to Asia instead, he added.

“In general the market remains strong after a recent cold snap in Europe that drew down storage, as well as ongoing concerns about remaining Russian pipeline gas flows to Europe,” said Alex Froley, senior LNG analyst at data intelligence firm ICIS.

“New supply is on the horizon, with U.S. Plaquemines and Corpus Christi plants advancing towards new capacity starting up, but the impact on the immediate winter may be relatively limited.

In Europe, S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in January on an ex-ship (DES) basis at $14.271/mmBtu on Nov. 28, a $0.215/mmBtu discount to the January gas price at the Dutch TTF hub.

Argus assessed the price at $14.260/mmBtu, while Spark Commodities assessed the December delivery price at $14.083/mmBtu.

A widening of the JKM-TTF spread this week helped to tighten the U.S. arb via the Cape of Good Hope for December loading, said Anais Mathilde La Chon, data analyst at Spark Commodities.

“As of today, for the U.S. arbs to Asia versus Europe to break even, freight rates must fall to $7,750 per day.”

Atlantic LNG freight rates rose to $17,500/day on Friday, while Pacific rates also gained to $24,000/day.

Source: Reuters reported by Emily Chow and edited by Jan Harvey