Global LNG prices in Asia fall amid falling European market, outlook remains bullish

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A liquefied natural gas (LNG) tanker leaves the dock after it is unloaded at PetroChina’s receiving terminal in Dalian, Liaoning province, China July 16, 2018. REUTERS / Chen Aizhu / File Photo / File Photo

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LONDON, Dec. 30 (Reuters) – Asian liquefied natural gas (LNG) prices fell this week on weak Asian demand and lower European gas prices amid restricted holiday trading, though the bullish outlook remains due to concerns about the tightening of European supply.

The average LNG price for February delivery in North East Asia fell to 33.8 per million British thermal units (mmBtu), down $ 14.5, or about 30% from the previous week, industry sources said.

Demand in Asia has stagnated as buyers weathered high spot market prices which recently hit around $ 45 / mmBtu and favored alternative fuels, but demand could pick up in January, Rystad Energy said in a report. .

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European gas prices have fallen from historic highs last week despite concerns over Russian supply with the Yamal pipeline that carries Russian gas to heat homes and electricity production in Germany has remained on target. reverse, returning fuel to Poland for a 10th day on Thursday. Read more

The arrival of several LNG carriers lowered prices and helped offset the weakness of Russia’s exports

European LNG imports for December were estimated at 9.1 million tonnes on Thursday, the third highest month on record, up from 6.2 million tonnes in December 2020, according to Laura Page, senior LNG analyst for the United States. KPLR data intelligence company.

However, concerns about low storage capacity in Europe, currently at 55% and the lengthy approval process for Nord Stream 2 remain a bullish factor that should support prices.

“In January, weather reports and on-offer items such as Nord Stream 2 are likely to continue to boost sentiment in Europe, and therefore globally, although in Asia, LNG stocks from major utilities in Japanese electricity are currently above four-year average rates, which may temper earnings, ”said Robert Songer, LNG analyst at data intelligence firm CIHI.

LNG spot freight rates in the Pacific fell 28% week-over-week to $ 85,500 per day, according to data intelligence firm Spark Commodities.

LNG cargoes have continued to divert from Asia and other countries to Europe, and several other vessels appear to linger around European coasts, potentially awaiting a recovery in prices after the sharp declines seen in Europe in the past. over the Christmas period, Songer added.

However, traders and analysts said some shipments did not directly benefit Northwest Europe, with shipments aboard Minerva Chios, Maran Gas Vergina eventually delivered to Turkey and Greece, and cargo aboard Minerva Chios. Marvel Crane who initially headed to Britain and ended up in Spain instead.

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Reporting by Marwa Rashad; Editing by Emelia Sithole-Matarise

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