News wire — Demand for liquefied natural gas, LNG, for heating fell last week after a harsh winter in Asia that sent prices to record highs in January, with traders now booking cargoes for delivery in warmer months.
Asian spot LNG prices fell for a fourth week as markets in China and most of Southeast Asia closed for the Lunar New Year, according to Reuters.
The average LNG price for March delivery into Northeast Asia LNG-AS was estimated at around $6.90 per million British thermal units, mmBtu – 30 cents lower than the previous week, with just one cargo changing hands during the week within the S&P Global Platts window.
While sellers including Kuwait Petroleum made offers, the only confirmed cargo was sold by Petrochina to Vitol, traders said.
The deal closed at a premium of $0.60 over the European reference price, the Title Transfer Facility, or TTF, in the Netherlands. The premium was attributed to low liquidity, one trader said.
March TTF futures closed at $6.571 per mmBtu in London on Thursday, slight lower than the Asian close a day earlier, the price assessment agency said.
Temperatures in Tokyo and Shanghai, in two of the world’s top LNG consuming countries, are expected to rise above the historical average in late March, when cargoes currently being booked will be delivered, weather data from Refinitiv Eikon showed.
U.S. vessels that were redirected to Asia amid the winter cold spell may start flowing to Europe for storage replenishment, consultancy firm Poten & Partners said.
While Asia has limited tanking capacity, Europe has substantial underground space that can take the whole summer to fill, the firm said.