LONDON, July 20 (Reuters): Asian spot liquefied natural gas (LNG) prices declined this week due to weaker demand and strong inventories and as buyers in south Asia found current prices too high.
The average LNG price for September delivery into north-east Asia was at $12.30 per million British thermal units (mmBtu), down from $12.90/mmBtu last week, industry sources estimated.
"Prices have been in a slow downtrend this week due to ample supply and higher inventories. However, we expect Asian utilities to start stepping in to procure for cooling demand as temperatures rise in Asia," said Toby Copson, chairman at Davenport Energy Partners.
"Demand remains relatively weak on a macro scale with U.S.and European hubs reflecting that," he added.
Cooling demand from a heatwave in Japan and South Korea has mostly been met by coal, said Martin Senior, head of LNG pricing at Argus. Some production outages have cropped up, including at Australia's Gorgon's third LNG train, the U.S.' Elba Island terminal and United Arab Emirates' Das Island undergoing maintenance, he said.
"However, the outages have not pushed Asia to compete for Atlantic basin (cargoes) and current prices were too high for many price sensitive buyers in south Asia and China to compete for spot supply," Senior added.
In Europe, gas prices rose slightly during the week on Norwegian unplanned maintenance but dipped on Friday as supply from Norway rose.
The European Union on Friday agreed an 18th package of sanctions against Russia over its war in Ukraine, including measures aimed at dealing further blows to the Russian oil and energy industry. The package also includes banning transactions related to Russia's Nord Stream gas pipelines under the Baltic Sea, and with Russia's financial sector.
"While the new EU sanctions package puts a definite halt to the re-utilisation of Nord Stream, it does not change the supply outlook for European gas markets.
