GLOBAL LNG-Asian LNG prices little changed as oversupply persists
Asian spot liquefied natural gas (LNG) prices were little changed this week, as a demand recovery from some buyers in the region was not enough to absorb global oversupply.
The average LNG price for August delivery into northeast Asia LNG-AS was estimated at between $2.15-$2.30 per million British thermal units (mmBtu), compared to the July delivery assessment of $2.10 per mmBtu and an August estimation of around $2.20-2.30 per mmBtu last week.
Asian spot demand is expected to be driven up by hot weather in the third quarter this year, fuel switching in some of the markets and lockdown easing, consultancy Energy Aspects said in a report this week.
But the glimmers of hope for Asian demand for spot cargoes are more than offset by the need for these firms to ramp-up their imports under long-term contracts and continued demand weakness, it added.
Several Chinese buyers were looking for cargoes this week.
China’s Guangzhou Gas had a tender to buy a cargo for July 27-31 delivery and awarded its tender at or slightly below $2.20 per mmBtu, two sources said.
Shenzhen Energy was looking for an August delivery cargo, separate two sources said.
Some market sources said they were concerned about whether the new outbreak of the coronavirus in Beijing would reduce spot buying, but added it had no impact on prices yet.
In Japan, Tohoku Electric was on the market, an industry source said.
Unseasonably warm weather is expected in Japan in the third quarter, Energy Aspects said.
In terms of supply, a late July cargo from Russia’s Sakhalin plant was awarded at around $2.20 per mmBtu on a delivered-ex-ship (DES) basis, while an early August cargo from Brunei LNG could have been sold at $2.20-$2.30 per mmBtu, market sources said.
Angola LNG, BHP Group, Russia’s Novatek and Indonesia’s Pertamina also offered cargoes in tenders.
Source: Reuters (Reporting by Ekaterina Kravtsova; editing by Nina Chestney)