Asian spot LNG prices slightly up on muted demand

LONDON, Nov 17 (Reuters): Asian spot liquefied natural gas (LNG) rose slightly last week tracking European gas markets, while warm weather forecasts, strong storage inventories and weak economic data in China helped keep demand muted.
The average LNG price for December delivery into northeast Asia LNG-AS rose slightly to $13.60 per million British thermal units (mmBtu) from $13.40/mmBtu last week, industry sources estimated.
The price for January delivery was estimated at $14/mmBtu.
"Asian LNG front-month prices remained largely stable...due to a rise in European TTF prices. This stability reflects weak fundamentals, with robust supply and reduced demand driven by unseasonably warm weather," said Go Katayama, LNG and natural gas analyst at Kpler.
"Although colder temperatures are forecasted for Northeast Asia, these are expected to remain brief. Some spot demand may arise as winter progresses, but ample spot supply should keep prices balanced for the week ahead," Katayama added.
In Japan and South Korea, temperatures will gradually drop towards normal levels in the coming week, however, heating demand across Asia remains lower than average for the time of year, said Klaas Dozeman, market analyst at Brainchild Commodity Intelligence.
Economic numbers have been pressuring industrial demand, most notably the disappointing inflation numbers from China accompanied by lower producer prices, he said.
Asian prices were supported by European gas prices which rose to a near one-year high amid ongoing concerns over Russian supply and as cold weather sapped gas stocks.
Austrian energy group OMV said an award of more than $243 million in connection with irregular German gas supplies from Gazprom could impact its Gazprom supply deal.
Extremely low wind output, particularly in Germany, coincided with temperature declines, resulting in high gas consumption for power and heating purposes, leading to significant net withdrawals from underground gas facilities across the continent, Kpler's Katayama said.
European gas storage sites were last 92.1 per cent full, down from 95.2 per cent seen at the start of the month, data from Gas Infrastructure Europe showed.
S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in December on an ex-ship (DES) basis at $14.058/mmBtu on Nov. 14, a $0.25/mmBtu discount to the December gas price at the Dutch TTF hub, the highest prices seen in nearly a year.
Argus assessed the price at $14.060/mmBtu, while Spark Commodities assessed it at $14.107/mmBtu.
On the back of this rally, the U.S. arbitrage, diverting a physical cargo from one market to another, to north-east Asia for December fell by $0.65 and is currently pricing in at $0.88/mmBtu, signalling that prompt month U.S. cargos are incentivised to voyage to Northwest Europe for an eighth week straight, said Spark Commodities analyst Qasim Afghan.