GLOBAL LNG Asian prices slip, trailing Europe as mild weather curbs demand | Popgen Tech
By Emily Chow
SINGAPORE, Dec 23 (Reuters) – Asian liquefied natural gas (LNG) spot prices fell this week for the first time in more than a month, tracking declines in European gas prices as milder winter temperatures reduced heating demand.
The average LNG price for February delivery in Northeast Asia was $31 per million British thermal units (mmBtu), down $7, or 18.4%, from the previous week, industry sources estimated.
Asian prices fell alongside much larger declines in the Dutch title transfer facility (TTF), Europe’s main natural gas futures market, as milder temperatures lowered expectations of local heating demand, said Ryhana Rasidi, gas and LNG analyst at data analytics firm Kpler. , said.
Asian prices fell less, she added, “likely due to the below-normal temperature outlook expected in Northeast Asia for the rest of the year.”
In Europe, S&P Global Commodity Insights pegged its daily Northwest Europe LNG marker price benchmark, for cargoes delivered in February on an ex-ship (DES) basis, at $27.069 per mmBtu on December 22, a discount of $2.025 per mmBtu on the February gas price at the Dutch TTF hub.
“Europe’s gas markets survived the first half of winter in reasonable shape in terms of supply. The region continued to receive steady inflows of LNG, and storage looks set to enter 2023 at a fairly high level,” says Alex Froley, analyst of ICIS LNG.
“Next year should see continued strong prices throughout the year as global LNG supply growth remains small. But regional spreads may tighten as Germany opens import capacity and as Asian demand recovers as China emerges from COVID-19 lockdowns.”
Europe has secured alternatives to Russian pipeline gas, including importing more LNG, after supplies were cut following Russia’s invasion of Ukraine.
Germany launched two LNG terminals in November, while six floating storage and regasification units (FSRUs) spread over four sites are expected to be online by the end of 2023.
European Union energy ministers agreed this week on a gasoline price in a bid to lower prices that have soared this year, pushing up energy bills and inflation.
In China, COVID infections are predicted to peak within a week after the world’s second-largest LNG importer abruptly dismantled measures to combat the spread of the virus. As workers fall ill, its economy is expected to experience short-term disruption before recovering next year.
LNG freight rates extended their downward trend this week, Spark Commodities CEO Tim Mendelssohn said.
Spark’s Atlantic rate for tankers fell to $153,000 a day on Friday while the Pacific rate fell to $160,750 a day. (Reporting by Emily Chow; Editing by Christian Schmollinger)