Asian spot LNG prices rose slightly last week, however remained close to a three-month low amid ample supply and mild weather forecasts.
The average LNG price for May delivery into northeast Asia was $14.60 per MMBtu, up from $13.40 per MMBtu the week before, 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, Davenport Energy Partners’ Chairman.
"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, Kpler’s Manager of gas and LNG insight.
"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 US LNG, which has been subject to a 15% tariff since 10th February," she said.
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 this week, supported by steady European gas movements, mild weather forecasts, ample supply projections, and rising expectations of restocking needs, said Ronald Pinto, Kpler’s LNG and gas analyst.
In Europe, above-average temperatures and a partial recovery of wind generation are expected to keep prices range-bound during the week but could rise later in the month, as temperatures drop below seasonal averages, Pinto said.
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 3 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 per MMBtu on 20th Marc, a $0.70 per MMBtu discount to the Dutch TTF hub’s May gas price.
US arbitrage to northeast Asia via the Cape of Good Hope remained steady, still incentivising US cargoes to deliver to Europe, said Spark Commodities analyst, Qasim Afghan.
In the LNG freight market, Afghan said that Atlantic rates had risen last week to $31,000 per day on Friday, the highest level this year thus far, while Pacific rates rose to $27,250 per day.
