Houston — Asian spot prices for liquefied natural gas (LNG) fell this week as a decline in European gas and oil prices saw competition for short-term fuel supply between the two continents ease.
The average LNG price for October delivery into Northeast Asia LNG-AS was estimated at about $15.50 per million British thermal units (mmBtu), down $1.55 from the previous week, industry sources said.
Spot prices for cargoes delivered in September are estimated at about $15.20 per mmBtu, they added.
Brent oil futures, over which the majority of Asian LNG contracts are priced against, hit lows not seen since May over concerns that new COVID-19 cases could weakened global demand.
European gas futures prices fell after Russia’s Gazprom raised supply estimates to the continent, offering at least a brief relief as Europe tries to increase its inventories from the decade-low levels.
“Buyers in Asia have been paying more, driving cargoes out of Europe, so new price spikes could still happen” a Houston-based trader said.
Milder weather in key consuming countries for LNG has also helped to reduce pressure over prices for the fuel, which is used to generate electricity used for cooling. Temperatures in Seoul and Tokyo are expected to be lower than average over the next two weeks, weather data from Refinitiv Eikon showed.
PetroChina was seeking cargoes for delivery between Oct. 1-5 in Tangshan, China, at a $0.40 discount over the Japan Korean marker, the reference price assessed by S&P Global Platts.
Engie bid at $16.59 for a cargo to be delivered between Oct. 30 and Nov. 3 to Pipechina Tianjin.
Shell is offering six cargoes for delivery between Oct 2021 and March 2022 loading from Sabine Pass project, with bids due on Aug. 19.
- Reuters (Reporting by Sabrina Valle, additional reporting by Jessica Jaganathan; editing by Emelia Sithole-Matarise)