SINGAPORE: Asian spot liquefied natural gas (LNG) remained flat for a second consecutive week, with buyers staying away at the end of the cooling season and waiting for price levels to fall further.
The average LNG price for November delivery into north-east Asia was at $13.10 per million British thermal units (mmBtu), industry sources estimated.
“Asian LNG prices remained largely stable this week despite ongoing geopolitical tensions and an attempted attack in the Middle East,” said Ana Subasic, natural gas and LNG analyst at data and analytics firm Kpler.
“This stability is mainly due to weakened spot demand following the end of the peak summer cooling season and an increase in supply week-on-week.”
Oil prices are headed for weekly gains of about 9% amid an escalating conflict in the Middle East, as Israel weighs its options after Iran launched its largest ever assault at Israel on Tuesday.
Analysts in an ANZ Research report also noted that rising inventories in Japan saw buyers pull back from the spot market, and some were reluctant to pay above $13.10/mmBtu.
Global LNG: Asian spot LNG price flat amid tepid demand
Inventories held by major Japanese utilities rose to 1.99 million tons as of Sept. 29, versus 1.63 million tons on Sept. 22.
Demand was also muted as top importer China is off for its Golden Week holiday from Oct. 1-7.
In Europe, S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in November on an ex-ship (DES) basis at $12.62/mmBtu on Oct. 3, a $0.21/mmBtu discount to the November gas price at the Dutch TTF hub.
Argus assessed the price for November delivery at $12.60/mmBtu, while Spark Commodities assessed it at $12.683/mmBtu.
“European gains came mostly from extensions to Norwegian upstream maintenance — and some unplanned downtime — while events in the Middle East also caused price volatility at points during the week,” said Samuel Good, head of LNG pricing at commodity pricing agency Argus.
“Most of the market were less concerned about any disruption for trade flows through the Strait of Hormuz than they were for any Israeli gas production disruptions which could impact Egyptian LNG demand.”
In LNG freight, Atlantic prices fell for a second straight week to $51,500/day on Friday, said Spark Commodities analyst Qasim Afghan.
Pacific rates continued decline for an eighth week, falling to $59,500/day.
“Freight rates in both basins are currently at their lowest levels in five years for this time of year,” said Afghan.
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