The Middle East escalated prices of GLOBAL LNG/-Asia, which led to the highest spot price since Dec-2022.
The Asian spot prices for liquefied gas have reached their highest levels since December '2022. This is due to the escalation in the Middle East conflict, the high European gas price and the strong demand before winter.
Average price for delivery to North-east Asia in October
Klaas Dozeman of Brainchild Commodity Intelligence, a market analyst, said that "very little LNG" was able make its way from the Gulf in the wake of recent attacks on ships.
He added, "This means that several South-Asian countries are forced to bid on spot cargoes at extremely high prices."
Ronald Pinto said that prices are expected to be supported next week as increased competition for supply is a result of the renewed Strait of Hormuz tensions, rising TTF and a firmer interest in winter procurement.
He added that "Bangladesh purchases, stronger Indian demand and resilient Southeast Asian gas burning add further support. This is partly offset by Japan's softer immediate demand and limited discretionary Chinese purchasing at elevated prices."
In the past week, the two main Asian buyers were Bangladesh and South Korea. Kogas bought around?14-20 cargoes between November and January, while Bangladesh purchased 20 cargoes from October to June. Martin Senior, Head of LNG Pricing at Argus, added that this is in addition to the spot tenders coming from Vietnam, Thailand, and India.
Gas prices in Europe hovered just above EUR80 after reaching their highest intraday level since December 2022.
Senior, Argus' Senior, said: "This exemplifies how tight the global LNG market is with the Strait of Hormuz shut and how sudden changes in demand from?Asia could send European prices soaring high."
Pinto said that the bullish momentum will likely continue into next week as planned maintenance in Algeria and Norway, along with the Belgian-UK Interconnector, will continue to limit?pipeline supplies into the EU. Meanwhile, LNG imports should be on the decline due to the competition emerging from Asia?and the Americas.
Aly Blakeway is the head of Atlantic LNG at S&P Global Energy. She said that EU storage levels were uncomfortably small ahead of winter. This makes European gas and LNG price highly sensitive to potential supply disruptions and geopolitical events.
S&P Global Energy's daily Northwest Europe LNG benchmark price for October cargoes on a ship-to-ship basis was $27.490/mmBtu, on Thursday. This is a $0.47/mmBtu reduction from the Dutch TTF Gas Hub's front-month price.
Spark Commodities estimated the price at $27.445/mmBtu while Argus valued it at $27.420/mmBtu.
The Atlantic rate for LNG freight has risen to $20,000/day. Pacific rates remained steady at $24,000/day according to Spark Commodities analyst Qasim Afghanistan.
The current price of U.S. Gulf Coast immediate cargoes is $26.367/mmBtu. Afghan said that the U.S. arbitrage for the first month of the year to North-East Asia via Cape of Good Hope still points firmly towards Europe while the arbitrage through Panama is open to Asia.
(source: Reuters)
