SINGAPORE- Asian spot liquefied natural gas (LNG) prices edged up last week, buoyed by stronger demand due to above-average temperatures in east Asia, but gains were capped as inventories remained high.
The average LNG price for September delivery into northeast Asia was $11 per million British thermal units (mmBtu), industry sources estimated, up from $10.80/mmBtu the previous week.
“Asian spot LNG prices rose on stronger downstream gas demand in various regions facing heatwaves, such as Japan, Taiwan, South Korea and some parts of China,” said Rystad Energy analyst Masanori Odaka.
High storage levels, however, have been sufficient for the strengthened demand, leading some Asian importers to take a wait-and-see approach for additional spot purchases, added Odaka.
“Overall, it is still a tug of war between bearish signals – high inventories in Asia and Europe, sluggish Chinese demand recovery, and weak European industrial activity – and bullish signals – heatwaves in parts of the US , Asia and Europe, and unexpected LNG production outages or maintenances lasting longer than expected.”
The impact of higher temperatures on LNG demand has also been limited by the continued availability of nuclear and renewables generation, said Samuel Good, head of LNG pricing at commodity pricing agency Argus. – Reuters
