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.