Spot gas prices in key East Asian markets have fallen below British wholesale levels for the first time since May 2010 amid a global oversupply.
The ICIS East Asia Index (EAX) for March 2015 settled at $6.85/million British thermal units on Wednesday, below the British March 2015 hub price of $6.92/MMBtu.
On the same date last year, the EAX March 2015 price stood at $19.84/MMBtu with the British equivalent contract at $9.90/MMBtu.
The ICIS Japan front-month spot price was assessed on Wednesday at its lowest level since June 2010, at $6.875/MMBtu.
East Asian spot prices have traded at a big premium to Europe in recent winters amid high weather-driven demand, nuclear outages in Japan and higher oil prices. Oil prices directly determine the price of a majority of long-term LNG contracts in East Asia on a lagged basis.
British front-month gas prices are currently around 30% cheaper than at the same time last year. British demand has been lower than usual over the winter because of mild weather and lower consumption from the fuel generation sector.
British gas demand stood at just over 79 billion cubic metres in 2014, down from over 85bcm in 2013, ICIS report shows.
LNG imports accounted for around 25% of UK gas supply between October 2014 and the start of February. The UK sources most of its gas from domestic production and imports from Norway.