Asian LNG spot prices remain at 7-month high amid Russian supply concerns

By Marwa Rashad

LONDON (Reuters) – Spot liquefied natural gas (LNG) prices in Asia remained at the highest level in more than seven months, tracking European gains amid concerns about supply disruptions.

The average LNG price for September delivery in Northeast Asia was $12.90 per million British thermal units (mmBtu), industry sources estimated. This is the highest level since mid-December and up from $12.80/mmBtu last week.

“The rise in Asian prices this week was largely supported by European gains, with LNG demand in Northeast Asia remaining tepid despite hot weather across much of the region, particularly in South Korea, which is also facing some unplanned nuclear outages,” said Samuel Good. , head of LNG pricing at commodity pricing agency Argus.

Above-average temperatures are forecast in South Korea, Japan, as well as Beijing and Shanghai, China, next week, which could support strong cooling demand. However, southeastern China – where much of the gas production capacity is located – could return to normal temperatures in the coming weeks, leaving little room for a jump in energy demand later in the summer, Good Said said.

Gas demand remains high enough in Asia to attract cargoes, said Klaas Dozeman, market analyst at Brainchild Commodity Intelligence, adding that current price levels could drive price-sensitive buyers away from the spot market.

Dozeman said the latest forecast of the La Nina weather pattern has weakened, which could help lower next winter’s gas demand in Asia and North America compared to previous forecasts.

In Europe, gas prices rose this week due to increased geopolitical risk in the Middle East and after Ukraine mounted a surprise incursion into Russia’s Kursk region, where Russian natural gas flows into Ukraine.

The benchmark front-month contract on the Dutch TTF center traded at 40.25 euros on Friday, its highest level since December 8.

“Although deliveries through the point have been little changed, traders remain concerned that the almost -40 million cubic meters per day of gas passing through Sudzha could be affected, leaving an incentive for some to adjust their trading positions In an attempt to avoid gas shortages, prices would rise,” said Argus’ Good.

S&P Global Commodity Insights valued its daily Northwest European LNG Marker (NWM) benchmark price for September-delivered cargoes on an ex-ship (DES) basis at $12.676/mmBtu on August 8, a discount of US$0.15/mmBtu compared to the September gas price. at TTF’s Dutch hub.

Spark Commodities valued the price at $12,717/mmBtu, while Argus valued it at $12,700/mmBtu.

The story continues

Atlantic LNG freight rates rose for the first time in a month to $75,250/day on Friday, while Pacific rates rose for the seventh consecutive week to $86,750/day, said Spark Commodities analyst Qasim Afghan.

(Reporting by Marwa Rashad; Editing by Nina Chestney)