Last week, the Asian prices for liquefied natural gas (LNG) improved on the back of higher demand after declining for three weeks.
According to industry sources, the average LNG price for December delivery into Northeast Asia climbed by 6.8% from the previous week or USD2 to USD31.5/mmBu.
Emily McClain, senior gas markets analyst at Rystad Energy said that inventories could deplete rapidly due to the constant lower temperatures than normal, and buyers could run back to the spot market where prices need to remain elevated to hold the arbitrage against the European TTF.
Currently, market players are intensely monitoring the transit capacity auctions on Monday, which would indicate the Russian gas supply to Europe for the upcoming months. The concern was based on the Europe-Belarus political row.
McClain elaborated that at the moment, the stabilized supply-side is balanced by the picture of colder temperatures in North Asia and Europe, along with the increasingly congesting vessels at the Panama Canal.
Economist Hans van Cleef of ABN Amro said that the spread between Asia’s JKM and TTF was widening again, in part due to the pressure on TTF as Russia signaled to fulfill its exports commitments towards northwest Europe and the wider demand from Asia on account of colder weather.
According to data intelligence firm Spark Commodities, on Friday, the Pacific LNG freight spot rates hit a record high and surpassed USD291,000/day.
In a development regarding supply, Angola’s LNG project has launched a tender to sell LNG for November-December delivery to as far as southeast Asia.
Regarding demand, the Electricity Generating Authority of Thailand (EGAT) is seeking an LNG cargo for delivery in December, in a re-issue from a previous tender.
