Asian spot LNG) prices saw little change last week, as ample inventories and mild weather capped demand from East Asian buyers.
The average LNG price for March delivery into north-east Asia rose slightly to $14 per MMBtu, industry sources estimated.
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"Demand in Asia remains tepid, with East Asia demand relatively constrained amidst warmer than usual weather," said Pang Lu Ming, Rystad Energy senior analyst, talking with S&P Global, adding that local forecasts indicated that South Korea and Japan would see above-normal temperatures through to early and mid-February.
While southern China will also experience warmer than normal temperatures in coming days, colder temperatures will be seen in parts of the north, Pang said.
East Asian inventories were quoted as ample.
"Activity from Japanese players remains subdued, implying sufficient winter inventories for existing forecasts," Pang added, saying South Korean and Chinese players also continued to report sufficient inventories for winter.
In Europe, S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in March on an ex-ship (DES) basis at $14.589 per MMBtu on 23rd January, a $0.37 per MMBtu discount to the March gas price at the Dutch TTF hub.
Natasha Fielding, head of European gas, LNG and biomass pricing at Argus, noted European delivered LNG prices had increased their premium over northeast Asian markets, pointing to storm disruption to US loadings and higher summer restocking demands, following a German proposal to subsidise summer injections.
Freeport LNG also closed its export plant in Texas last Tuesday, due to a power feed problem during a winter storm.
The European premium has further persuaded companies to ship uncommitted LNG cargoes in the Atlantic basin to Europe instead of Asia, and they could also start to pull Middle Eastern supply away from Asia, Fielding added.
LNG freight rates fell to record lows, with Atlantic rates dropping for a third straight week to $9,000 per day on Friday driven by an influx of newbuildings and the directing of US spot cargoes to Europe, said Spark Commodities analyst, Qasim Afghan.
Pacific rates fell to $15,500 per day.
The US arbitrage to northeast Asia via the Cape of Good Hope for February widened, again indicating that US cargoes have an incentive to deliver to Europe, Afghan added.
He also said that the Qatar front month arbitrage to Northeast Asia had closed out for the first time in almost two years, also incentivising deliveries to Europe over Asia.
