SINGAPORE, Nov 29 (Reuters) - Asian spot liquefied
natural gas (LNG) prices gained for a third consecutive week to
hit a new high for the year so far as colder weather in the
region drove demand.
The average LNG price for January delivery into northeast
Asia was at $15.10 per million British thermal units
(mmBtu), up 3.4% from the previous week, industry sources
estimated.
"Heating demand is set to be particularly strong in Japan,
with forecasts for daily minimum temperatures in Tokyo
suggesting a prolonged period of colder weather into the start
of the new calendar year," said Samuel Good, head of LNG pricing
at commodity pricing agency Argus.
LNG inventories held by major Japanese electric utilities
were at 2.06 million metric tons as of Nov. 24, down from 2.16
million metric tons during the corresponding period of last year
and the five-year average of 2.13 million metric tons.
While Beijing is forecast for a mild spell over the coming
days, temperatures are set to dip below seasonal norms in the
second half of December, said Good.
"But forecasts for Seoul suggest a sustained patch of mild
weather, which could substantially limit heating demand through
the mid-winter period."
Stronger demand in the region has led some LNG vessels
initially heading for Europe to divert to Asia instead, he
added.
"In general the market remains strong after a recent cold
snap in Europe that drew down storage, as well as ongoing
concerns about remaining Russian pipeline gas flows to Europe,"
said Alex Froley, senior LNG analyst at data intelligence firm
ICIS.
"New supply is on the horizon, with U.S. Plaquemines and
Corpus Christi plants advancing towards new capacity starting
up, but the impact on the immediate winter may be relatively
limited.
In Europe, S&P Global Commodity Insights assessed its daily
North West Europe LNG Marker (NWM) price benchmark for cargoes
delivered in January on an ex-ship (DES) basis at $14.271/mmBtu
on Nov. 28, a $0.215/mmBtu discount to the January gas price at
the Dutch TTF hub.
Argus assessed the price at $14.260/mmBtu, while Spark
Commodities assessed the December delivery price at
$14.083/mmBtu.
A widening of the JKM-TTF spread this week helped to tighten
the U.S. arb via the Cape of Good Hope for December loading,
said Anais Mathilde La Chon, data analyst at Spark Commodities.
"As of today, for the U.S. arbs to Asia versus Europe to
break even, freight rates must fall to $7,750 per day."
Atlantic LNG freight rates rose to $17,500/day on Friday,
while Pacific rates also gained to $24,000/day.