Key market indicators April 22-26

Prompt LNG prices have eased, despite ongoing global risks factors, particularly around the Middle East.

Platts, part of S&P Global Commodity Insights, assessed the June JKM, the benchmark price for LNG cargoes delivered to Northeast Asia, at $10.332/MMBtu on April 22, down 35.9 cents/MMBtu on the day. Meanwhile, the West India Marker was assessed at $9.813/MMBtu.

Northwest Europe, Mediterranean
European LNG has become the premium market, after mixing it with Asian demand and prices for weeks.

Platts assessed the DES Northwest Europe Marker for May at $9.519/MMBtu on April 19, down 47.7 cents/MMBtu on the day and 7.4 cents/MMBtu on the week, S&P Global Commodity Insights data showed. Platts assessed the Mediterranean marker at a 2.5 cents/MMBtu discount to Northwest Europe and the East Mediterranean at a 20 cents/MMBtu premium to Northwest Europe.

“A lot of factors have affected the prices recently lifting it to a three-month high, so I think some counterparties will try to wait and not take any unnecessary moves … until things cool down,” said a second Atlantic-based trader,” one Atlantic-based trader said.

Gas storage levels in the EU rose 0.4% on the week and be 62.1% full as of April 20, according to Aggregated Gas Storage Inventory data. Meanwhile, EU LNG inventories stood at 4.991 million cu m, up 58,000 cu m on the week.

In the East Med, “Greece wants to boost its role in regional gas trade to become a key regional hub for southeastern Europe and the Balkans,” according to S&P Global Commodity Insights analysts.

“The new Alexandroupolis floating storage and regasification facility (FSRU) will start commercial operations by the end of April 2024, boosting Greek regasification capacity to 13.1 Bcm/year … almost three times the size of the Greek national market.”

Americas
The US market continued to eye subdued feedgas levels, particularly to Freeport LNG’s export terminal.

Total feedgas deliveries to major liquefaction terminals in the US stood at 10.92 Bcf on April 19, compared with around 13.55 Bcf at this time last year, S&P Global data showed.

Freeport LNG’s feedgas demand has fallen since a trip to the facility’s Train 3 liquefaction unit, with deliveries averaging 56 MMcf/d since April 11, following the event. In comparison, Freeport received around 822 MMcf/d during the first 10 days of April.

Further South, Argentinian state LNG importer ENARSA pushed back the closing date of its recent procurement tender by a week to April 23, according to sources.

ENARSA is seeking 10 cargoes of 2.1 trillion Btu each for delivery to the Escobar terminal in Buenos Aires. Three cargoes were to be delivered in June, six in July, and one on Aug. 5.

Platts assessed DES Brazil for delivery 15-45 days forward at $9.498/MMBtu, or at a 2.1 cents/MMBtu discount to Northwest Europe.

LNG swaps
Strength in next winter has been incentivizing some stronger stocking requirements at the prompt. Despite healthy inventories, traders were looking to replenish supply earlier to avoid any supply-side issues.

Platts assessed the June DES Northwest Europe derivative at $9.509/MMBtu on April 19, with October at $9.784/MMBtu.

Traders previously saw the arbitrage to Asia being favorable versus Europe for sellers between June and August, but the recent strength in Europe has seen the arbitrage to continent strengthen in May and June.

The region has been competing with atypical demand from regions like Latin America and Egypt, which has kept the prices elevated.

Rhe cooling of prices across Asian markets could also help to temper market sentiment in the Atlantic Basin. “It seems that demand from Asia is not desperate, and they track those price moves very carefully,” the trader said.
Source: Platts