Global LNG: Asian spot prices ease to over one-year low amid ample inventory levels

Prices of Asian spot liquefied natural gas (LNG) eased for a seventh consecutive week, falling to a near one-and-a-half year low, amid ample inventories in North Asia and Europe.

The average LNG price for March delivery into Northeast Asia (LNG-AS) was at $18.50 per million British thermal units (mmBtu), industry sources estimated, its lowest levels since August 2021.

This is $1, or 5.1%, lower than the previous week, and down 34% since the start of the year.

“Both Europe and North Asia are expected to exit winter with comfortable gas storage cushions and are not under pressure for prompt procurement,” said Lee Ken Kiat, senior analyst for gas and LNG at consultancy FGE.

“(The) impending Freeport restart has contributed to improved sentiment and softer prices, but it is still unclear how quickly the plant will ramp back up to capacity,” he added, referring to the plant of Freeport LNG which shut due to a fire in June.

In Europe, S&P Global Commodity Insights assessed its daily north-west Europe LNG Marker (NWM) price benchmark for cargoes delivered in March on ex-ship (DES) basis at $16.759/mmBtu on Feb. 2, a discount of $1.10/mmBtu to the March gas price at the Dutch gas TTF hub, said Ciaran Roe, global director of LNG.

Through to late March, forecasts for minimum temperatures are broadly above seasonal norms, with the exception of a brief cold spell next week, added Argus’ Good.

“Together with continued sizeable underground gas storage inventories, this has continued to hold European gas hub prices lower than the levels we’d seen through most of last year,” he said.

Meanwhile on LNG spot freight, Atlantic rates were little changed on the week at $55,750/day on Friday, said Henry Bennett, global head of pricing at Spark Commodities. Pacific rates, however, slid to $68,750/day.
Source: Reuters