LONDON: Asian spot liquefied natural gas (LNG) prices rose slightly this week but remained close to a three-month low amid ample supply and mild weather forecasts.
The average LNG price for May delivery into north-east Asia was at $14.60 per million British thermal units (mmBtu), up from $13.40/mmBtu last week, industry sources estimated.
“It’s currently a reactionary market: hard to forecast what will happen next given an environment of new tariffs, sanctions and potential new supply volume becoming operational,” said Toby Copson, chairman at Davenport Energy Partners.
“Conversely, we’re coming in to summer procurement months so that may push spot demand up and buoy current prices,” he added.
Meanwhile, Asian demand for contracted LNG, such as from Qatar, is strong with oil-linked contracts trending at a discount to spot prices, said Laura Page, manager of gas and LNG insight at Kpler.
“In particular, Qatari deliveries to Taiwan have been above the five-year average in Q1 while deliveries to China are picking up in March, likely displacing U.S. LNG which has been subject to a 15% tariff since February 10,” she added.
Global LNG: Asian spot LNG prices dip amid tepid demand
In India, a forecast heatwave could spur some LNG demand for cooling despite LNG being too expensive for many Indian importers at present, said Martin Senior, Argus head of LNG pricing.
Asian prices are expected to remain stable next week, supported by steady European gas movements, mild weather forecasts, ample supply projections, and rising expectations of restocking needs, said Ronald Pinto, LNG and gas analyst at data analytics firm Kpler.
In Europe, above-average temperatures and a partial recovery of wind generation are expected to keep prices range-bound next week but could rise later in March as temperatures drop below seasonal averages, Pinto added.
European storage inventories are around 34% full as the market readies to switch from withdrawal to injection mode over the coming months.
“Storage didn’t come close to running out but filling it will require Europe to continue competing strongly against Asia for LNG across the summer, likely pricing some smaller new importers out of the market,” said Alex Froley, senior LNG analyst at ICIS.
“But as LNG Canada and the next six trains at Corpus Christi stage III ramp-up over the course of the summer this should add quite a lot of extra LNG into the market,” he added.
S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in May on an ex-ship (DES) basis at $12.916/mmBtu on March 20, a $0.70/mmBtu discount to the May gas price at the Dutch TTF hub.
Argus assessed the price for March delivery at $13.15/mmBtu, while Spark Commodities assessed the April price at $12.988/mmBtu.
The U.S. arbitrage to north-east Asia via the Cape of Good Hope remained steady, incentivising U.S. cargoes to deliver to Europe, said Spark Commodities analyst Qasim Afghan.
In the LNG freight market, Atlantic rates rose this week to $31,000/day on Friday, the highest level this year so far, while Pacific rates rose to $27,250/day, Afghan added.
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