LNG

European natural gas prices and Asian spot LNG cargo values moved higher on April 15 in early market activity after the weekend drone and ballistic missile attacks on Israel by Iran further unsettled energy markets.

Intercontinental Exchange Inc., the leading global provider of energy trading platforms, said that global futures and options markets reached record open interest of almost 94 million contracts during March as market players in sectors such as oil, natural gas and LNG launched hedging operations as prices declined.

One of the valuations of long-term liquefied natural gas contract cargoes is the North Sea Brent crude oil price benchmark which is changing for ever with the inclusion of select US oil cargoes in the Brent complex delivered to Europe from June.

Perth Australia-based, Beach Energy has agreed to sell 3.75 mill tonnes of LNG to bp.

The collapse of US oil prices into negative territory affected only physical barrels of West Texas Intermediate (WTI) crude for May delivery and was not a general oil price crash. The global benchmark North Sea Brent crude prices is largely unaffected, nor are future WTI prices.

Inpex Corp., the Japanese oil and gas company with stakes in major LNG export plants and projects such as Ichthys and Prelude FLNG in Australia and Abadi LNG in Indonesia, said it was joining the new ICE Futures Abu Dhabi (IFAD) venture backed by Intercontinental Exchange Inc. of the US as part of continuing efforts to balance portfolio risk.

Asian LNG spot cargo prices firmed recently amid tentative signs of some peak summer demand. However, the problem remains that for many buyers, the cost is still too high, said Reuters in a report.  

Australian LNG stakeholder Santos has rejected the $10.8-billion takeover offer from US equity fund Harbour Energy because it undervalued the Adelaide-based company and would have required Santos to provide significant support for Harbour’s debt-raising and to hedge a significant proportion of oil-linked production.

The US expects rising natural gas production will support the forecast surge in LNG and pipeline exports in next 12 months as well as re-establishing storage levels after the smallest April injections for inventories since 1983.

US natural gas futures on the New York Mercantile Exchange soared because of high natural gas withdrawals in the latest storage report as US West Texas Intermediate crude prices hit a 12-month high and North Sea Brent oil stayed above the $70 per barrel mark.