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GLOBAL LNG-Asia spot LNG at fresh three-month high on supply concerns
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GLOBAL LNG-Asia spot LNG at fresh three-month high on supply concerns
Apr 19, 2024 6:22 AM

LONDON, April 19 (Reuters) - Asian spot liquefied

natural gas (LNG) prices rose this week to a new three-month

high due to supply concerns amid tensions in the Middle East and

a drop in feedgas deliveries to two LNG terminals in the United

States.

The average LNG price for June delivery into north-east Asia

rose to $10.50 per million British thermal units

(mmBtu), its highest since Jan. 12, industry sources estimated.

Prices hit a 15-week high earlier this week, slightly

exceeding $11.00/mmBtu, tracking gains in European gas markets,

but have softened since then.

"Spot gas prices have been strong over the last week due to

the ongoing conflict in the Middle East and its impact on oil

prices; a series of feedgas dips at U.S. LNG plants; Norwegian

outages and Egypt's switch back to import mode," said Alex

Froley, senior LNG analyst at data intelligence firm ICIS.

"Higher oil prices would push up the price of oil-linked LNG

import contracts still common in Asia. The U.S. feedgas falls

could indicate lower production and exports, though they may

only be short-lived," he added.

Explosions echoed over an Iranian city on Friday in what

sources described as an Israeli attack, but Tehran played down

the incident and indicated it had no plans for retaliation - a

response that appeared gauged towards averting region-wide war.

The rise of LNG prices above the $10.00/mmBtu threshold

again has curbed Asian buyers' demand for spot cargoes, said

Samuel Good, head of LNG pricing at commodity pricing agency

Argus.

"In turn, this closed the inter-basin arbitrage again even

with low spot charter rates - which also fell slightly over the

week - already heavily limiting the premium needed for Asian

markets to draw Atlantic spot supply away from Europe," he said.

In Europe, gas prices saw strong gains earlier in the week,

mainly driven by concerns over Freeport LNG and cooler weather

forecast for the rest of April, suggesting ample scope for a

brief mid/late April resurgence in heating demand, Good added.

On March 20, Freeport said its Train 2 liquefaction unit had

been shut down, while Train 1 will be taken down imminently as

it expects inspections and any subsequent repairs at both the

units to be completed by May.

Traders said there was lower feedgas at Sabine Pass LNG

export unit in Cameron Parish, Louisiana, but said it was likely

a short-term outage.

S&P Global Commodity Insights assessed its daily North West

Europe LNG Marker (NWM) price benchmark for cargoes delivered in

June on an ex-ship (DES) basis at $9.996/mmBtu on April 18, a

$0.12/mmBtu discount to the gas price at the Dutch TTF hub.

Argus assessed the June delivery price at $9.9/mmBtu, while

Spark Commodities assessed May delivery at $9.860/mmBtu.

On spot LNG freight, both the Atlantic and Pacific rates

were steady this week, with the Atlantic spot rate estimated at

$44,000/day on Friday and the Pacific spot rate at $46,250/day,

said Spark Commodities analyst Qasim Afghan,

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