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Asian spot liquefied natural gas (LNG) prices fell for the sixth straight week to their lowest level in more than two years, while European LNG prices also declined on weak demand and high inventories.

The average LNG price for July delivery into northeast Asia was down 5.3% from the previous week at $9 per million British thermal units (mmBtu), according to industry estimates, the lowest since April 2021. Asia LNG prices have not risen week-over-week in the 22 weeks since mid-December.

“Market fundamentals are still quite bearish in Europe in terms of gas storage and domestic consumption, which could continue to weigh on prices in the near term,” said Ryhana Rasidi, LNG analyst at analytics firm Kpler.

Prices also fell in northeastern Asia this week as inventories remained healthy, she said.

Weak downstream demand and high storage levels were driving Asian prices lower, consultancy Rystad Energy said in a note late on Wednesday, adding there were fears that limited demand could further the downward trend.

“We expect the latter half of 2023 to be supported by weather-driven demand in Europe and Asia,” Rystad said.

Global LNG: Asian spot LNG prices slide for fifth straight week on low demand

Samuel Good, head of LNG pricing at commodity pricing agency Argus, said the prospect of greater supply in northeast Asia weighed on northeast Asian delivered prices this week.

“Questions remain whether northeast Asia could absorb enough LNG to balance the global market, with lower prices having only a limited impact on spurring that demand that has been absent in the past year,” Good said.

“Downstream demand has continued to remain weak in the broader region, even as spot LNG prices have made the fuel more competitive in some of its power sectors,” he said.

In Europe, traders and consumers are watching for cues on the reopening of Norway’s Hammerfest LNG plant, which was shut down this week after a leak.

Operator Equinor said on Wednesday it was too soon to say when production would resume.

Hammerfest LNG, Europe’s only such large-scale project, can process 18.4 million cubic metres (mcm) of gas per day when fully operational.

Argus assessed its daily north-west Europe LNG Marker (NWM) price benchmark for cargoes delivered in July on an ex-ship (DES) basis at $7.15/mmBtu on May 31, a $0.91/mmBtu discount to the July gas price at the Dutch gas TTF hub.

Spot LNG freight rates firmed this week, with Atlantic spotrates recovering from near one-year lows to $38,250/day on Thursday, and Pacific rates surging to $40,000/day, according to Edward Armitage, an analyst at Spark Commodities.

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