LONDON, May 7 (Reuters): Asian spot liquefied natural gas (LNG) prices hit a 23-month low last week on mild weather and weak restocking demand in China, Japan and Korea, while Europe enjoys 60 per cent full inventories ahead of summer.
The average LNG price for June delivery into northeast Asia LNG-AS was $11 per million British thermal units (mmBtu) on Friday, the lowest since June 2021. The price is 4.3 per cent down from the previous week, industry sources estimated.
"Demand is still scarce, however a prompt cargo was booked to a south Chinese utility that might signal prices are appealing enough to play spot," said Toby Copson, global head of trading at Trident LNG.
Leo Kabouche, LNG market analyst at research consultancy Energy Aspects, said spot prices are unlikely to receive much support in the near-term, with northeast Asian buyers not competing for flexible Atlantic basin LNG cargoes and Europe potentially having less flexibility to absorb spot shipments if underground storage sites reach full capacity.
Kaushal Ramesh, senior LNG analyst at Rystad Energy, said that in addition to seasonality-driven bearishness, the weakening macro sentiment -manifested in 12 per cent lower oil prices week on week- is pushing prices down.
He said that prompt buying activity is only seen in South Asia and Thailand that are roiling from an early heatwave which will support demand for gas fired power generation, but even this has not been enough to stem the decline in prices.
In addition to India and Thailand's buy tenders, Vietnam is set to join the LNG market as a buyer for the first time, issuing a tender seeking a commissioning cargo for its first ever import terminal, the 1-Mtpa Thi Vai LNG, said Ryhana Rasidi, gas and LNG analyst at data analytics firm Kpler.
In Europe, there are no signs of substantial early summer cooling demand emerging this month, and while temperatures have been high in Spain, this hasn't fully translated over to power sector gas demand with renewable output curbing the call on the country's thermal fleet, said Samuel Good, head of LNG pricing at commodity pricing agency Argus.
"Broad expectations in the market that the flow of Atlantic basin LNG to Europe could continue - even during later summer if not next winter - have further curbed concerns for Europe's summer stockbuild," Good added.
Northwest Europe (NWE) LNG price hit a 23-month low, sliding below $10/mmBtu for the first time since June 2021.
