Asian spot LNG prices were flat last week, remaining at a 10-week low amid Europe’s bearish gas price sentiment.
However, some emerging spot demand did curb losses.
The average LNG price for April delivery into northeast Asia was at $13.50 per MMBtu, industry sources estimated, reported S&P Global.
Asian LNG prices were bearish, driven by anticipated declines in the Dutch TTF benchmark in Europe and stable Pacific supply, said Kpler analyst. Go Katayama.
“Looking ahead, Asian LNG prices are expected to decline this week, driven by anticipated weakness in European TTF, continued soft Asian fundamentals, and stable Pacific supply.
“Warmer weather forecasts in northeast Asia will likely curb gas-for-power demand in March, following accelerated inventory drawdowns by power utilities in February,” he said.
South Korean and Japanese importers spot demand, including Korea Gas Corp, JERA, Tokyo Gas and Osaka Gas, recently emerged, as buyers sought to replenish stocks after a cold winter, said Rystad Energy in a note.
In Europe, S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in April on an ex-ship (DES) basis at $11.402 per MMBtu on 6th March, a $0.55 per MMBtu discount to the Dutch TTF hub April gas hub.
“A key driver behind this fall is multi-strategic investment funds selling the TTF to de-risk as equities have fallen,” said Martin Senior, Argus head of LNG pricing.
He added, prices were also weighed down by Venture Global’s announcement that it expects to load 219-239 cargoes from its Plaquemines project this year, as it was higher than expected and could loosen a tight summer balance.
In addition, a European Commission proposal to retain gas storage requirements and targets for two more years but with added flexibility reduced pressure on summer injection demand, said Rabobank energy strategist, Florence Schmit.
The proposal said the target to fill EU gas storage caverns to 90% capacity by 1st November would remain binding, but targets in earlier months are ‘indicative’ - which typically means non-binding.
“Slowly materialising changes to the storage mandates alongside growing expectations that some Russian flows will return to the energy mix has turned sentiment around,” Schmit added.
In the LNG freight markets, Atlantic rates eased to $19,500 per day last Friday, while Pacific rates rose to $17,500 per day, said Spark Commodities analyst, Qasim Afghan.
He added the US arbitrage to northeast Asia via the Cape of Good Hope narrowed for a sixth consecutive week, with US cargoes no longer strongly incentivised to deliver to northwest Europe over Asia.
