LNG

The Japan Korea Marker (JKM) for LNG delivery into northeast Asia for September could exceed $22/MMBtu at the start of this week as shipping disruptions widens and competition for Atlantic Basin cargoes intensifies between Europe and Asia.

European liquefied natural gas price benchmarks dropped this week to their lowest since late July 2021 when energy security contagion first entered the market as North Asian spot cargo prices also lost ground but at a slower pace.

Shipbrokers in the London market reported a move to more charter activity in September as August had seen the LNG market feel very subdued on a prompt basis with notably fewer spot fixtures than in the previous month.

Nov 5 (LNGJ) - Shipping charter rates for LNG carriers in the spot market slipped in the past week by up to $7,500 per day. Rates were quoted at an average of between $97,000 per day and $102,000 per day West of Suez. The same levels of spot rates were also talked about for the East of Suez charter market for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers.

CME Group, the global exchange and energy and commodities derivates trading and clearance platform operator, said it planned to offer the first futures contracts for liquefied natural gas freight.

Excess growth in global LNG supply, notably through the ramp-up of US LNG through 2018 and into 2019, will make European gas prices “move through the coal floor [price]”. Fuel-switching in the Western European power market, according to Societe Generale, will ultimately be determined by short-term gas prices hinging at the variable cost of shipping a US LNG cargo to Europe.