Global Lng: New cargo offers depress LNG prices
18/04/2019 13:00
By Ekaterina Kravtsova
LONDON, April 18 (Reuters) - The upward trend in Asian
liquefied natural gas (LNG) prices reversed this week as ample
offers of cargoes saturated a market where demand was limited.
After rising for two weeks to reach over $6.00 per million
British thermal units (mmBtu) in the second week of April, the
June price for delivery of LNG into northeast Asia LNG-AS
dropped into $5.00 territory, sources said.
The average June price was estimated at $5.40 per mmBtu on
Thursday as offers of supply met with sluggish demand and a drop
in European gas prices.
Reflecting the low levels of local demand, China National
Offshore Oil Corp (CNOOC) issued a sell tender for a July
delivery cargo to ports outside China from its Hainan terminal.
urn:newsml:reuters.com:*:nL5N21Z3OP
Offers also came from Australia's Ichthys project and
Malaysian producer Petronas, each for one June cargo, three
trade sources said.
Energy majors BP and Royal Dutch Shell are also offering
June cargoes, two of the sources said.
On the demand side, Japan's Toho Gas Co 9533.T is looking
for a cargo to be delivered in July, with the rest of Asia's
requirements largely fulfilled last week.
South Korea's GS Energy GSHOLE.UL bought a cargo last week
for early June delivery at a price close to $6.00 per mmBtu, LNG
traders said.
Argentine energy company Integracion Energetica Argentina
(IEASA), formerly known as ENARSA, has a buy tender for eight
August cargoes open until April 25. urn:newsml:reuters.com:*:nL5N21Y3ME
Indian companies continued to look for cargoes but limited
import capacity was not leaving much room for spot deliveries, a
source active on the Indian market said.
Prices for June supply to the country followed the downward
trend in northeast Asian prices and were estimated at $5.10 per
mmBtu on Thursday.
Indian Oil Corp IOC.NS has a tender for June delivery
open until April 24. urn:newsml:reuters.com:*:nL5N2202YI
In Europe, trading activity was subdued, with only
opportunistic interest in LNG cargoes amid a generally
oversupplied European gas market.
The front-month price in the Netherlands has dropped by
almost 30 cents in the past week and traded just below $5.00 per
mmBtu on Thursday. LNG cargoes were priced at around a 30 cent
discount to benchmark gas hub prices, traders said.
Asian LNG front-month prices regained a premium over the
Dutch front-month price this week for the first time since
mid-March. However, the premium was still too small to open the
arbitrage between Pacific and Atlantic basins and incentivise
spot trade of Atlantic cargoes into Asia.
(Reporting by Ekaterina Kravtsova; Editing by Kirsten Donovan)
((Ekaterina.Kravtsova@thomsonreuters.com; +442075420980;
Reuters Messaging:
ekaterina.kravtsova.thomsonreuters.com@reuters.net))