Having hit a two-year low, trading in single digits for nearly two months, LNG Japan Korea Marker (JKM_ Future contracts took an unexpected turn -gaining as much as 17 percent in a single trading session. This is comfortably the largest single-day hike in LNG price recorded history – that also includes the sharp spike that took prices as high as $70/mmbtu last year in August.

Recall that Europe’s brimming storages had kept the LNG market in a supply glut, with lot more vessels available for trading – unlike second half of 2022. Warmer temperatures have surely helped, but nothing can be said with certainty about the upcoming winter season. All eyes are now firmly focused on China and other big Asian buyers – as oil prices seem to have been responding to positive demand growth – steadying in the high $70s.

Norway’s LNG plant outage has added fuel to the fire, as normalization is believed to take more time than earlier communicated. LNG Delivered-Ex-Ship rates for July in most markets are settling around $13/mmbtu – up from $10-11/mmbtu for most of second quarter. A spike as big as 16 percent in a day will not likely go unnoticed – and it could be a precursor to what is in store. While LNG at or around the all0time highs recorded last year is unlikely to be repeated, the direction could well be a repeat of last year. More times than not, LNG prices in spot and future markets in June, tend to be a leading indicator of significantly higher winter rates.

Pakistan, meanwhile promises to be more active on the LNG trade front from July 2023 onwards, after a lackluster year that nearly threw it into irrelevance in the larger scheme of LNG market. There is much fanfare around the Azerbaijan state-to-state deal, which promises gas on “discounted” and “cheaper” rates to Pakistan. Just why Azerbaijan would be willing to commit one cargo a month to a dollar-starved country like Pakistan, at “discount” is beyond belief, but here is hoping finer details will emerge soon to offer more clarity.

More importantly, after a gap of months and being ignored by suppliers for the last spot auction – Pakistan LNG Limited has returned in the market throwing two separate bids. The first tender seeks six cargoes – three each for October and December, and the second one is looking for three cargoes in January and February. The bidding result will offer more insights into how the LNG future market looks like in the peak demand season – and what is the level of Pakistan’s reputation as a committed buyer after all what it has gone through in the past few months. July 14 is the all-important date when the tender closes, to know what the future holds for Pakistan’s LNG prospects – both in terms of availability and affordability.