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Weak demand, above-average temperatures weigh on prices

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Eyes on longer-term US stance on LNG pause, geopolitics

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Arbitrage signals US cargoes should still head to Europe

By Marwa Rashad

LONDON, Nov 8 (Reuters) - The average LNG price for

December delivery into north-east Asia fell to $13.40

per million British thermal units (mmBtu), down from $13.80

mmBtu last week, industry sources estimated.

"Spot demand has been slow to emerge in north-east Asia,"

said Samuel Good, head of LNG pricing at commodity pricing

agency Argus.

Good said temperatures in both Seoul and Shanghai are

forecast to remain above-average through late December which

could weigh on gas demand.

Chinese LNG imports were the highest ever for October, at

around 6.5 million metric tons, which could be more stocking up

ahead of winter than a sign of a longer-term bullish trend, said

Alex Froley, senior LNG analyst at data intelligence firm ICIS.

The LNG market has generally shrugged off Trump's return to

the White House but the market is closely monitoring his stance,

particularly towards Joe Biden's pause on approvals to export

LNG from new projects, as well as on the Middle East, China and

Russia.

"It will take a while to see the full impacts of Trump's

victory in the U.S. elections. In broad terms, the environment

for gas and LNG producers will be more favourable than it would

have been under a Democrat president," Froley said.

"But there could also be new tariffs imposed on global trade

as well as potential major foreign policy shifts that it's hard

to fully judge as yet, beyond expecting volatility to continue,"

he added.

In Europe, gas inventories have started to decline due to

colder weather and a few days of no wind and solar output,

triggering some upward price pressure for prices at the Dutch

TTF hub, said Hans Van Cleef, chief energy economist at PZ -

Energy Research & Strategy.

Summer 2025 TTF contract prices are higher that those of

Winter 2025, in what is known as backwardation.

"Europe will likely end this winter with lower stocks

compared to the last winter, meaning its LNG demand requirements

will rise next year and the region will have to outbid

price-sensitive buyers in Asia, which is creating support for

summer prices already," said Florence Schmit, energy strategist

at Rabobank London

S&P Global Commodity Insights assessed its daily North West

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

December on an ex-ship (DES) basis at $12.82/mmBtu on Nov. 7, a

$0.22/mmBtu discount to the December gas price at the Dutch TTF

hub.

Argus assessed the price at $12.820/mmBtu, while Spark

Commodities assessed it at $12.879/mmBtu.

The U.S. arbitrage, diverting a physical cargo from one

market to another, to north-east Asia for December is currently

pricing in at $-0.23/mmBtu, meaning prompt month U.S. cargoes

are incentivised to head to north-west Europe for a seventh

straight week, said Spark Commodities analyst Qasim Afghan.

In LNG freight, Atlantic rates have risen for the first time

in seven weeks to $20,500/day on Friday, while Pacific rates

continued to decline for a 13th straight week to $38,250/day, he

added.