LNG chain: Correlation
Prices it moves with, and why
Most Asian LNG is sold on long-term contracts priced as a percentage of crude oil, averaged over earlier months. A growing share trades spot or is linked to Henry Hub or European gas prices.
Market price World Bank LNG import price, Japan US$/mmbtu · monthly, Jan 2006 to Sep 2026What its price moves with
Selected linkLNG chain and Crude oil
Monthly changes -0.06 little or none correlation 12-month changes 0.56 moderate correlation Last 5 years 0.01 monthly changes Lead or lag +4 mo Crude oil tends to lead by 4 months (r 0.54) Price function, Jan 2006 to Sep 2026 LNG chain ≈ 0.761 × (Crude oil)0.63 R² 0.45 On this fit, a 10% higher crude oil price goes with a 6.2% higher LNG chain price over the long run. Units: US$/mmbtu and $/bbl.Chart: LNG chain and Crude oil prices rebased to 100 at Jan 2006, log scale
Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size.Chart: LNG chain price against Crude oil price, monthly, log scales, with fitted line
Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic.Japanese LNG contracts link price to the Japan crude cocktail averaged over earlier months. The data show this clearly: monthly changes barely correlate, at -0.06, but crude leads LNG by about four months and yearly moves correlate at 0.56.
little or none co-movement month to month · 249 months Show chartsEuropean gas and Asian LNG compete for the same flexible cargoes, so a shortage in Europe pulls spot LNG up. Yearly moves correlate at 0.71, while monthly moves correlate only at 0.15 because most Japanese supply is oil-linked.
little or none co-movement month to month · 249 months Show chartsThe biomethane proxy is the US Henry Hub price, which sets the feedgas cost of US LNG exports. Henry Hub linked cargoes are a small part of Japan's imports, so monthly moves barely relate, at 0.14, and yearly moves correlate only moderately, at 0.52.
little or none co-movement month to month · 249 months Show chartsLNG travels in specialised carriers, and shipping is a large part of delivered cost on long routes. The freight proxy correlates at 0.22 for monthly moves and 0.73 for yearly moves, as both respond to energy trade cycles.
weak co-movement month to month · 249 months Show chartsPower plants in Japan, Korea and India switch between LNG and coal as relative prices change, and both rose together during the European gas crisis. Yearly moves correlate at 0.71, while monthly moves correlate only at 0.11.
little or none co-movement month to month · 249 months Show chartsLiquefaction plants, carriers and import tanks use nickel alloy steels that stay tough at the very low temperatures needed. Nickel is a small share of project cost, and the data show no relation, with monthly moves at -0.03.
little or none co-movement month to month · 249 months Show chartsHow to read these numbers
Correlation of monthly changes (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak.
12-month changes compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs.
Price function is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation.
Lead or lag checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months.
Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link.
Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site.