Asian spot liquefied natural gas (LNG) prices have seen a slight uptick this week but remain below $10 per million British thermal units (mmBtu) for the third week running as weak demand continues to steer prices.
The average LNG price for March delivery into north-east Asia LNG-AS rose slightly by $0.10 this week to $9.60/mmBtu, industry sources estimated.
The United States’ second-largest exporter Freeport LNG said on Friday it expects one of three liquefaction units at its Texas plant will be out of service for about a month after it faced a technical issue during last week’s Arctic freeze.
“There was little reaction from prices after the announcement of downtime at the Freeport LNG, with ample cargo availability in the Atlantic basin,” said Samuel Good, head of LNG pricing at commodity pricing agency Argus.
“Lower prices have continued to underpin a rise in purchasing activity in south Asia but demand has also emerged in China, where a range of different buyers have come to the spot market, partly due to expectations for a cold end to the Chinese heating season,” he added.
Good said that north-east Asian prices are broadly at enough of a premium to Europe to draw spot supply from west Africa.
The market’s bearish momentum has slowed recently as short positions have been gradually built up during January, said Jake Horslen, senior LNG analyst at Energy Aspects.
“All eyes are now on European LNG line-ups for February to try and gauge what impact the Freeport outage and Qatari diversions will have on the rate of imports in the weeks ahead,” he added.
In Europe, gas prices at the Dutch TTF hub were stable on Friday as strong wind power output and mild temperatures for the time of year curbed demand.
“The markets overall are feeling very comfortable with Europe likely to end winter with storage still half full,” said Alex Froley, LNG analyst at data intelligence firm ICIS.
“That makes it easier to fill storage back up over summer, while by late this year and early 2025 we could start to see the impact of new U.S. production from projects like Corpus Christi stage three, meaning the global situation will be improving,” Froley said.
Europe’s gas stores are currently 70% full, Gas Infrastructure Europe data showed.
S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in March on an ex-ship (DES) basis at $8.509/mmBtu on Feb. 1, a $0.70/mmBtu discount to the March gas price at the Dutch TTF hub.
Argus assessed the price at $8.500/mmBtu, while Spark Commodities assessed it at $8.561/mmBtu.
U.S. LNG exports fell last month nearly 5% below the December record, LSEG ship tracking data showed, on cold weather and the Freeport outage.
Spot LNG freight rates dropped for the ninth consecutive week, with Atlantic rates estimated at $52,750/day on Friday, and Pacific rates at $53,250/day, said Qasim Afghan, an analyst at Spark Commodities.
Source: Reuters (Reporting by Marwa Rashad; Editing by Nina Chestney)