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GLOBAL LNG-Asia spot prices hold at near 6-month top as heatwave persists
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GLOBAL LNG-Asia spot prices hold at near 6-month top as heatwave persists
May 31, 2024 4:56 AM

SINGAPORE, May 31 (Reuters) - Asian spot liquefied

natural gas (LNG) prices saw a slight decline this week, but

still held near a six-month top as hot weather in the region

encouraged demand for cooling, and as Northeast Asian buyers

focus on supplies for the summer.

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

was at $12.00 per million British thermal units

(mmBtu), industry sources estimated. This is slightly down from

$12.30/mmBtu in the previous week, which was its highest levels

since mid-December.

"(The) heatwave has strengthened downstream gas demand in

India but this is also a price-sensitive market. Currently,

Indian importers have no choice but to import spot LNG due to

surging power demand amidst the hottest heatwaves," said

Masanori Odaka, senior analyst at Rystad Energy.

Delivery into India, however, is often at a discount to

Europe or the rest of Asia, added Odaka, "so the impact on

global prices are limited."

India is experiencing a blisteringly hot summer, with a part

of capital Delhi recording the country's highest ever

temperature at 52.9 degrees Celsius (127.22°F) this week. At

least 15 people have died of suspected heatstroke in the

country's eastern states.

Southeast Asian buyers like Thailand's state-energy firm PTT

and Philippines power producer First Gen also issued tenders

this week seeking supplies for delivery in July.

In northeast Asia, South Korea and Japan are both forecast

for hotter than normal weather through most of June and well

into July, said Samuel Good, head of LNG pricing at commodity

pricing agency Argus.

"Several Japanese power utilities have already purchased

cargoes for June-July delivery, so their current interest is

pointing more towards August onward delivery," added Rystad's

Odaka.

In Europe, S&P Global Commodity Insights assessed its daily

North West Europe LNG Marker (NWM) price benchmark for cargoes

delivered in July on an ex-ship (DES) basis at $11.023/mmBtu on

May 30, a $0.14/mmBtu discount to the July gas price at the

Dutch TTF hub.

Argus assessed the July delivery price at $11.00/mmBtu,

while Spark Commodities assessed the June delivery price at

$11.026/mmBtu.

"In Europe, TTF gas markets have found some support on the

back of increased Asian LNG demand," said Hans Van Cleef, chief

energy economist at PZ-Energy.

"Although European gas inventories are well filled, and the

filling season is still in progress, market participants seem to

react nervously when there are signals regarding higher Asian

demand, or supply disruptions as we have seen due to the

unexpected Norwegian outages."

In the United States, Argus' Good said that production has

increased as the Cameron LNG terminal in Louisiana has raised

its feedgas intake "to levels that would suggest all three

trains are operating close to capacity."

Sabine Pass inflows, however, remain lower than would

usually be seen during winter months, he added.

Meanwhile, LNG freight rates continued to increase this

week, said Spark Commodities analyst Qasim Afghan. Atlantic

rates jumped to $52,500/day on Friday, while Pacific rates rose

to $45,250/day.

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