SINGAPORE: Asian spot liquefied natural gas (LNG) prices held steady this week amid higher temperatures in Northeast Asia and the anticipation of the approaching monsoon season in South Asia.
The average LNG price for August delivery into north-east Asia was at $12.60 per million British thermal units (mmBtu), industry sources estimated.
“Higher temperatures forecasted for Northeast Asia next week are offset by cooler weather in South and Southeast Asia as the monsoon season approaches,” said Ana Subasic, a natural gas and LNG analyst at data and analytics firm Kpler.
“Asian LNG front-month prices are also expected to be steady next week with expectations of Australia’s Wheatstone LNG supply returning to production.”
On June 10, Chevron suspended production at its Wheatstone gas facility in Australia to repair the platform’s fuel gas system. It said on Friday that restart activities at the facility are ongoing.
Hot weather across Asia had spurred LNG demand, pushing prices up to a six-month top last week. After grappling with record-high summer temperatures, India’s monsoon is advancing after stalling for over a week, with rains set to cover central parts of the country in the coming days, said weather officials.
Global LNG: Asia spot prices gain on hot weather, Australia facility outage
In China, southern provinces issued severe flood warnings due to heavy rains, but areas in the northwest and east experienced record-high temperatures.
“While expectations for power sector gas burn elsewhere in northeast Asia are firm, with hot weather forecast for the coming weeks, there remains some uncertainty on stock levels, with some suggesting high South Korean stocks which could limit additional LNG demand,” said Samuel Good, head of LNG pricing at commodity pricing agency Argus.
In Europe, S&P Global Commodity Insights assessed its daily northwest Europe LNG Marker (NWM) price benchmark for cargoes delivered in August on an ex-ship (DES) basis at $10.815/mmBtu on June 20, a $0.085/mmBtu discount to the August gas price at the Dutch TTF hub.
Argus assessed the August delivery price at $10.750/mmBtu, while Spark Commodities assessed the July delivery price at $10.715/mmBtu.
“The market has largely shrugged off further news of the EU’s planned ban on transshipment of Russian LNG,” said Argus’ Good. The European Union agreed on a package of sanctions against Russia, including banning re-exports of Russian LNG in EU waters.
“Market activity in the Atlantic basin was limited by firms holding back cargoes ahead of the Egypt’s Natural Gas Holding Company (EGAS) tender closing next week, suggesting scope for an increase in activity in the closing days of June.”
Egypt is seeking large gas volumes from global markets this summer with deferred payments of up to six months, terms that market sources said would narrow the list of bidders and increase premiums.
Good added that the prompt inter-basin arbitrage for U.S. loadings has remained open in recent days, leaving Asian firms generally more competitive for this supply.
Meanwhile, LNG freight rates in the Atlantic saw its largest week-on-week rise since October 2023, gaining to $75,000/day on Friday amid increasing demand, said Spark Commodities analyst Qasim Afghan. Pacific rates however eased to $47,750/day.
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