Geopolitical tensions pull Asia spot LNG prices

- Advertisement -

LONDON- Asian spot liquefied natural gas (LNG) prices remained below $10 per million British thermal units (mmBtu) for the second week running, as solid inventories and mild weather continue to outweigh geopolitical risk related to the Red Sea conflict.

The average LNG price for March delivery into north-east Asia remained unchanged from last week’s level at $9.50/mmBtu, industry sources estimated.

“The market has been subdued for most of the week. However, we’re now seeing volatility with utilities coming in who are short,” said Toby Copson, head of energy, APAC, at commodities broker Marex.

- Advertisement -

Spot LNG demand from price-sensitive Asian buyers has seen an increase, as Asian LNG prices have fallen below the $10/mmBtu mark, said Laura Page, manager of gas and LNG insight at data analytics firm Kpler.

She added that the materializing demand in Asia, coupled with recent downside pressure on the European gas prices at the Dutch TTF hub has seen US netback shift back in favor of Asia. Netback is the effective price earned by a producer of LNG at a particular point.

Attacks in the Red Sea by Iranian-backed Houthi militants have recently pushed Qatar, one of the world’s largest LNG exporters, to take a longer route via the Cape of Good Hope, delaying shipments to European clients.

“The Red Sea remains devoid of any LNG shipping. The cessation of Red Sea voyages by Qatar, Europe’s only supplier via the Suez Canal, has a big implication for delivery rates,” said Robert Songer, LNG analyst at data intelligence firm ICIS.

“However, the impact on spot charter rates has so far been non-existent, which may suggest that Qatar has not yet had to enter the market to procure further tonnage,” Songer added.

Author

- Advertisement -

Share post: