New wire – Lower demand for natural gas was seen last week from China and India where buyers have mostly remained on the sidelines despite a power crunch due to high prices, traders said.
This came as Asia liquefied natural gas, LNG, prices fell for a second straight week, tracking losses in European wholesale gas prices after Russia’s president said Gazprom could start pumping gas into European storage soon, easing competition for Asia.
The average LNG price for December delivery into Northeast Asia LNG-AS fell to $31 per metric million British thermal units (mmBtu), down $3.50 or about 10% from the previous week, industry sources said.
European gas prices fell on Thursday last week after Russian President Vladimir Putin told the head of Kremlin-controlled energy giant Gazprom to start pumping natural gas into European gas storage once Russia finishes filling its own stocks, which may happen by Nov. 8.
“China appears to be ramping up refinery production and using more coal, so LNG demand is down a bit,” a Singapore-based trader said.
India’s Petronet did not award a tender seeking a cargo for delivery in the second half of November due to high prices, a second source said.
Some cargoes were offered or sold from Australia and Oman, which also weighed on prices.
Australia’s Ichthys LNG sold a cargo for loading in mid-November at just above $30 per mmBtu on a free-on-board (FOB) basis, while Oman is offering LNG cargoes for delivery in November, sources said.
Still, some demand kept spot prices elevated.
Japanese buyers, including utilities and at least one gas company, are looking for cargoes to be delivered in winter as they anticipate a spike in demand for heating, industry sources said.
Earlier the week, Thailand’s PTT bought two cargoes for delivery in November and December at just above $33 per mmBtu, sources said.