LONDON, Mar 31 (Reuters): Asian spot liquefied natural gas (LNG) prices were little moved last week, holding on to a six-week high amid emerging spot demand in both southeast Asia and Europe.
The average LNG price for May delivery into northeast Asia rose 1.1% , or $0.10, from the previous week to $9.50 per million British thermal units (mmBtu), a level not seen since Feb. 9, industry sources estimated.
The price has hovered between $9 and $10/mmBtu this week, discouraging some Asian buyers from buying spot volumes as prices went back closer to $10/mmBtu, said Masanori Odaka, senior analyst at Oslo-based consultancy Rystad Energy.
Southeast China is set for a hot turn to summer, with daily maximum temperatures forecast to be several degrees Celsius above long-term averages for the coming week, suggesting scope for some early power sector cooling demand, said Samuel Good, head of LNG pricing at commodity pricing agency Argus.
Good added that daily highs in northeast China, South Korea and Japan are also forecast to rise above seasonal averages in the coming week or two, but are likely to fall short of the heights needed to substantially drive power demand higher.
Market players are keeping a close eye on Japan, where the yen slid to a 34-year low against the US dollar on Wednesday.
"A weaker yen does raise the import price for Japanese utilities for both long-term oil-indexed cargoes and spot purchases, but it is doubtful that it would impede Japan's ability to secure sufficient oil & gas supply to meet domestic demand," an industry source told Reuters.
In Europe, gas prices fluctuated between $8-$9/mmBtu this week, amid strong storage inventories and milder weather forecast.
Rystad's Odaka said suppliers with US-origin LNG are incentivized to send their shipments to Europe rather than Asia due to longer shipping distances, despite Asian spot prices being around $1 higher than in Europe this week.
S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in May on an ex-ship (DES) basis at $8.552/mmBtu on March 27, a $0.25/mmBtu discount to the May gas price at the Dutch TTF hub.
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