SINGAPORE: Asian spot liquefied natural gas (LNG) prices were flat this week after three weeks of gains, as low demand from Asian buyers and increased supply in Europe capped gains.
The average LNG price for July delivery into north-east Asia was at $12.40 per million British thermal units (mmBtu), industry sources estimated.
Despite extremely weak production at Malaysia’s Bintulu export terminal, which had been undergoing maintenance and delaying shipments, demand in Asia has also been soft with limited appetite this week, said Martin Senior, head of LNG pricing at Argus.
“Prices (are) still out of reach of price sensitive buyers in Asia, with limited requirements posted this week,” he said.
Buying interest seems to be stemming primarily from trading houses and portfolio majors, added Masanori Odaka, senior analyst at Rystad Energy.
“If prices fall another $1/mmBtu, then we will see interest from some Asian buyers,” he said, adding that while the arbitrage for U.S.-sourced LNG to Asia is closed this week, factoring in full shipping, the arbitrage for Nigeria supply to Asia is open.
S&P Global Commodity Insights assessed its daily North West Europe LNG Marker price benchmark for cargoes delivered in July on an ex-ship basis at $11.211/mmBtu on May 29, a $0.52/mmBtu discount to the July gas price at the Dutch TTF hub, with ample waterborne LNG cargoes and pipeline supply easing sentiment.
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Argus assessed the price for July delivery at $11.30/mmBtu, while Spark Commodities assessed the June price at $11.175/mmBtu.
“Improving renewables supply and recovering pipe-gas flows from Norway to the continent worked in tandem with an influx of LNG to meet the current demand across Europe,” said Aly Blakeway, manager of Atlantic LNG at S&P Global Commodity Insights.
“For now, European demand remains relatively sluggish with procurements of LNG and the pace of injections seeing a relative slowdown on the week.”
Meanwhile, the U.S. arbitrage to northeast Asia via the Cape of Good Hope decreased this week, but still pointed towards Europe, said Spark Commodities analyst Qasim Afghan.
The U.S. arbitrage to northeast Asia via Panama closed out for the first time in over three weeks, and is now also marginally pointing to Europe.
In LNG freight, Atlantic rates dropped for a fourth straight week to $29,500/day on Friday, while Pacific rates held steady at $20,750/day, he added.
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